The Morrison government will pour a further $58.6 million into the gas industry as part of a funding package for new gas storage facilities and a gas import terminal on Australia’s east coast.
The funding will be included in the federal budget, to be handed down on Tuesday next week and represents a doubling-down by the Morrison government on its ‘gas led recovery’ push to expand the gas industry.
The package includes support for Squadron Energy, backed by resources billionaire Andrew Forrest, to build a new gas import terminal at Port Kembla. It comes as the UN releases a new report that calls for a dramatic cut in methane emissions – much of which comes from the extraction of fossil gas – over the next decade.
The new Coalition funding also includes $32 million for a new gas storage and processing facility at Golden Beach in southern Victoria, and further funding will be provided towards the expansion of the South West Victorian Pipeline and the development of the Wallumbilla Gas Supply Hub in Queensland.
The new monies is being justified by the Morrison government based on recommendations made in the National Gas Infrastructure Plan, which the government has used to select priority gas projects. It follows a commitment of $52.9 million made in last year’s federal budget,
Federal energy and emissions reduction minister Angus Taylor said the commitment of more public funds to gas projects was needed to prevent a shortfall in domestic gas supplies. Taylor has been locked in a dispute over gas supply forecasts with the Australian Energy Market Operator, which has a different view.
“The government will not sit back and allow the shortfall to eventuate – the risk to the economy is too great,” Taylor said. “Without action to address supply, industry and households will be faced with higher prices, disruptions in supply and unplanned outages.”
The interim report of the National Gas Infrastructure Plan, published on Friday, said supply shortfalls in Australia’s east coast gas market are forecast to occur in 2024. The report also found that around 70 per cent of Australia’s gas production is directed to export markets.
In addition to the extra funding for the gas industry, the Morrison government is expected to allocate additional funding to Snowy Hydro in the forthcoming federal budget to facilitate the construction of a new $600 million gas fired generator at Kurri Kurri.
Handy summary of some of the major gas subsidies already announced and more planned.
This doesn't include major $ for CCS and hydrogen, much of which will support fossil gas. pic.twitter.com/dXSMgumuII
— Tom Swann (@Tom_Swann) May 7, 2021
Environmental groups slammed the commitment of more public funds to gas industry projects, saying the funds should be directed to expanding the clean energy industry.
“The fact that they’re considering giving millions to billionaire Twiggy Forrest, one of the richest men in Australia, to underwrite the Port Kembla gas terminal is more proof that Morrison is looking out for his wealthy mates through this economic crisis, not the rest of us,” 350 Australia Campaign Director Kelly Albion said.
“Every dollar the Morrison Government gives to the gas industry is money that can’t be spent on projects that deliver clean energy and good jobs.
Rapid cuts to methane best short term option to reduce emissions, UN report says
A new report by the Climate and Clean Air Coalition (CCAC) and the United Nations Environment Programme (UNEP) finds that cutting methane emissions is the most immediately effective measure that can be taken to limit global warming.
The report says it is possible to slash methane emissions by as much as 45 per cent before the end of the decade, and doing so would help avoid 0.3 degrees global warming temperature increases.
Methane is the main component of gas, and Australia’s methane emissions have been steadily increasing as a surge in gas production has resulted in increases in fugitive emissions. Methane also has a much higher potential to contribute to global warming, with a warming potential around 28 times greater than carbon dioxide.
“Cutting methane is the strongest lever we have to slow climate change over the next 25 years and complements necessary efforts to reduce carbon dioxide,” executive director of the UNEP Inger Andersen said.
“The benefits to society, economies, and the environment are numerous and far outweigh the cost. We need international cooperation to urgently reduce methane emissions as much as possible this decade.”
The announcement of further funding for gas projects also comes just a day after it was revealed that federal resources minister Keith Pitt vetoed a government loan that was to be provided by the Northern Australia Infrastructure Facility to a proposed Queensland wind farm.
Pitt justified the veto by saying providing such financial support to wind projects was inconsistent with Morrison government policy.