‘Tremendous opportunity’ versus ‘Flies in the face of smart economics’: PM’s Beetaloo plan reaction

by | Sep 17, 2020 | Business | 2 comments

Prime Minister Scott Morrison’s priority for Beetaloo Basin gas to be sent to the east coast has been described as both a “good first step” and a plan that “doesn’t make sense”.

In making the announcement on Tuesday Mr Morrison was encouraging private industry exploration in the NT deposit, as one of the first of five gas basins to be explored, with $28.3 million given to “plans” for them which were not specifically explained.

It was part of a series of ideas which included a gas reservation scheme, setting new gas supply targets with states and territories and enforcing potential “use-it or lose-it” requirements on gas licenses, and non-specific talk of pipelines and transportation to market, infrastructure he said the government would pay for if private industry did not.

The NT’s oil and gas sector says there is “tremendous opportunity” to turn natural resources – especially in the Beetaloo – into “long-term prosperity”, creating more jobs and driving economic growth.

But critics say the vision for a gas-led recovery to the coronavirus crisis is a recipe for “economic collapse” and a missed opportunity to ramp up Australia’s transition to a clean-energy future.

RELATED: Gas reservation policy integral to expansion of the NT economy – Can the NT transform?

Playing a major part of the Government’s JobMaker plan, Mr Morrison said an investment in gas supplies was critical to pushing down power prices.

“As we turn to our economic recovery from COVID-19, affordable gas will play a central role in re-establishing the strong economy we need for jobs growth, funding government services and opportunities for all,” he said.

The Government asserts the plan is a way forward to reduce emissions without imposing new costs on households amid an economic recession.

“These links will help put downward pressure on prices, shore up the reliability of our energy grid and create over 4,000 jobs,” the Prime Minister said.

“Our plan for Australia’s energy future is squarely focused on bringing down prices, keeping the lights on and reducing our emissions and these interconnectors bring us a step closer to that reality.”

Unlocking “world-class” resources critical to powering Australia’s economic recovery

Australian Petroleum Production and Exploration Association chief executive Andrew McConville said Morrison’s announcement is a good first step in “reinvigorating” Australia’s oil and gas industry.

He said competitively priced reliable energy is “crucial to the health of our nation’s economy”.

“While the average wholesale gas price in Australia last year was around 40 per cent less than the average wholesale price for the Asia Pacific region, more can be done to lower the retail price paid by consumers and businesses,” he said.

“The government’s plan recognises there is no silver bullet to driving down gas prices and that several steps need to be taken.

“Australia’s sparse geography and distance to market mean that underpinning gas pipeline infrastructure is critical to delivering affordable gas to Australian businesses and consumers.”

APPEA NT director Keld Knudsen said the sector is yet to see further details about the plan to “unlock” the Beetaloo.

But said he understood the plan centred on getting “development ready through delivering strategic pre-competitive economic, engineering and scientific studies to identify and remove potential roadblocks to development”.

“Australia has world-class resources reserves, and developing these basins provide stable, secure and affordable energy for Australia for decades to come,” he said.

“Our members are standing ready to invest hundreds of millions of dollars in exploration in the coming years, and in a success scenario that could result in potentially billions in investment.”

Mr McConville highlighted Australia’s oil and gas industry has invested more than $350 billion in oil and gas supply infrastructure development over the past decade, has contributed to government revenue through the payment of $71.6 billion in tax payments and levies, and directly supports 80,000 jobs.

Scott Morrison’s plan is a missed opportunity to transition to a clean-energy future

The Morrison Government’s focus on gas has drawn the ire of environmentalists who say there’s an opportunity for governments to support a green-led recovery as the COVID-19 pandemic devastates the economy.

Protect Country Alliance spokesman and former Darwin lord mayor, Graeme Sawyer, said the economics of the plan “don’t make sense”.

“Gas companies in Australia have written off up to $26 billion this year and globally there is a massive collapse in fracking companies who have recorded billions in losses,” Mr Sawyer said.

“When you look globally and see other countries accelerating attempts to hit energy targets and here we are going with fossil fuels, it flies in the face of science and it flies in the face of smart economics.”

Mr Sawyer cautioned the move could leave the Northern Territory bearing the costs of stranded assets and higher emissions.

As the Federal Government frames gas as a critical transition to renewables, Mr Sawyer says it is neither a sustainable investment nor a cleaner alternative to coal.

He said Morrison’s plan for an immediate economic stimulus at the Beetaloo does not take into account research to be undertaken prior to production of fracking, as recommended in the Independent Scientific Inquiry into Onshore Gas, spearheaded by Rachel Pepper.

Expected to take up to three years, he fears corners will be cut.

“The renewables recovery could start tomorrow,” he said.

“We have huge concerns the Gunner Government will respond to pressure and it will be future generations wearing the cost.”

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