6 June Future Gas Strategy June 6, 2024 By ER Law Admin Energy, Environment, Industry, Oil and Gas, Resources and Energy 0 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: 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; 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; 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; 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; Gas and electricity markets must adapt to remain fit for purpose throughout the energy transformation; and 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: 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; 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; 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; 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; 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 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. Related Articles The Federal Budget: A Future Made in Australia On Tuesday May 14, Dr Chalmers delivered the Federal Budget for 2025. A central part of the budget was the Future Made in Australia initiative which committed $22.7 billion over the next decade to attract investment and propel Australia as a renewable energy superpower globally. This is aimed at accelerating investment in priority industries that include critical minerals processing, renewable hydrogen, low carbon liquid fuels, green metals (which include some commodities produced using low-carbon technologies) and the manufacturing of clean energy technologies. The reality of resourcing the future Submission - DISER Consultation Paper December 2020 ‘Enhancing Australia’s decommissioning framework for offshore oil and gas activities’ Navigating the Future: Updates from the US, Japan, and New Zealand As the global energy landscape undergoes rapid transformation, nations around the world continue to redefine their strategies to address climate change, energy security, and economic sustainability. In this article, we delve into the latest updates from three diverse countries: the United States, Japan, and New Zealand. POWERING CONSUMER PROTECTIONS: WHY DECENTRALISED AND DISTRIBUTED ENERGY RESOURCES WARRANT A NEW LENS ON CONSUMER PROTECTION REGULATIONS Recent years have seen distributed energy resources usher in a new era of self-generation and reduced reliance on traditional centralised energy networks. Australian customers are increasingly enabled to access unconventional “behind the meter” energy sources and contribute to a two-way flow of energy back to the grid. QUEENSLAND’S MINE REHABILITATION REQUIREMENTS FOR VOIDS: ENSHAM CASE STUDY The State of Queensland reformed its mine rehabilitation legislation, namely the Environmental Protection Act 1994 (Qld) (EP Act), in 2018 through the Mineral and Energy Resources (Financial Provisioning) Act 2018 (Qld) (MERFP Act). A case study of the Ensham open-cut coal mine[i] in central Queensland highlights three issues for the efficacy of this regulatory framework. The first issue concerns an available exclusion of rehabilitation requirements for existing mining voids (the area of excavation created by open cut mining) in flood plains. Under the EP Act, as amended by the MERFP Act, a holder of an environmental authority (EA) may, in its Progressive Rehabilitation and Closure Plan (PRCP) and PRCP Schedule, identify land as a Non-use Management Area (NUMA).[ii] This is land that would not be rehabilitated “to a stable condition” and not have a post-mining land use. This rehabilitation exception as a NUMA is not applicable to mining voids wholly or partly in flood plains – these must be rehabilitated to a “stable condition”,[iii] as defined in the EP Act. This is the “section 126D(3) rehabilitation obligation”.[iv] However, the transitional provisions of the mining rehabilitation reforms differentiate the rehabilitation obligations of pre-existing mines (those existing at the time of the reforms, such as the Ensham Mine) and new site-specific mines.[v] Pre-existing mines with a “land outcome document” that presents an outcome similar to a NUMA can establish criteria for rehabilitation or management of a void in a flood plain that supersede this section 126D(3) rehabilitation obligation.[vi] The MERFP Bill Explanatory Notes for the transitional provisions reveal that this exemption from section 126D(3) “does not retrospectively breach existing rights and provides certainty to industry on the transitional process”.[vii] However, this grandfathering is arguably disconnected from environmental risks of such residual voids, creating two classes of mines based on the timing of a mine’s existence (pre-existing versus new). This Ensham case study provides an example of a pre-existing mine’s use of a “land outcome document” to exempt rehabilitation of residual voids in a flood plain but without clarity around the non-use management status of the area of the residual voids. The second issue discussed in this case study is progressive rehabilitation. The design of a financial assurance system to increase progressive rehabilitation was “a clear objective of the EPA’s work in 2004”, yet the EP Act fell short by failing to clearly outline criteria for certification of final rehabilitation for industry, and a scheme of refunding financial assurances at the termination of mining activity.[viii] These issues remained unaddressed until the 2015 State election when the then Labor Opposition ran on the campaign “[to] investigate the expansion of upfront rehabilitation bonds for resource companies to fully fund long-term rehabilitation activities”.[ix] Thereafter, the Queensland Treasury Corporation published a number of discussion papers advising of the shortcomings of the current financial assurance framework and that, in 2017, there were “220,000 hectares of disturbance, with an estimated rehabilitation cost of $8.7 billion”.[x] Queensland’s 2018 mining regulation amendments concerning progressive rehabilitation were intended to ensure “rigorous” review of NUMA approvals in PRCPs, “through an objective public interest evaluation” for future or newly established mines.[xi] However, the reforms may not effectively address instances in which progressive rehabilitation has been lacking in large, open-cut, mature mines in operation at the time of these legislative changes. As of 2021, approximately 33% of the Ensham Mine’s 4,944.7 ha of scheduled rehabilitation areas had been progressively rehabilitated.[xii] According to Ensham’s PRCP, this level of progressive rehabilitation exceeds that of other open-cut mines in Queensland.[xiii] For established mines, such as Ensham, that are approaching closure and have large voids that have not been substantially progressively rehabilitated across their mine life, the most economical rehabilitation option may be to rehabilitate residual voids to accord with legislated requirements. Under Queensland’s legislation, “rehabilitation” does not necessarily mean these voids will be re-filled. This may be contrary to community understanding of what rehabilitation is. Thirdly, this case study highlights areas in the regulatory framework in which information transparency could be improved – particularly public access to information – which raises issues of accountability, quality of community engagement and, ultimately, social licence on the part of mining companies and government. Information transparency is also relevant to community engagement and expectations for rehabilitation, such as the meaning of “rehabilitation” of residual voids (i.e., refilling to establish a pre-mining state versus the legislated “stable condition” standard). This article is structured as follows. Part 2 presents the legal and operational context of the Ensham Mine. It also describes the operational history of flooding and its relevance to rehabilitation and management of post-mining residual risks, which leads to a discussion of the rehabilitation legal reforms. Part 3 discusses the reform of Queensland’s rehabilitation legislation framework as it concerns residual voids, including the transitional provisions of the EP Act. Part 3 also explores Ensham’s Residual Void Project (RVP) for the development of the rehabilitation criteria for residual voids and considers the community engagement process. Part 4 comments on the transitional regulatory design issues in Queensland’s framework, issues concerning progressive rehabilitation of pre-existing open-cut mines such as Ensham, as well as transparency of information and community consultation. Part 5 concludes and suggests future research. Showing 0 Comment Comments are closed.