I’ve been responsible for developing some of Australia’s largest gas and electricity infrastructure over my 40-year career as an Origin Energy executive, from the Darling Downs Power Station in Queensland to Mortlake Power in Victoria to interstate gas pipelines.
Much of this construction started two decades ago, when gas seemed like a good option to help meet Australia’s growing energy needs. Then, solar and wind power were more expensive, lithium-ion batteries were barely out of the lab, and global greenhouse emissions were 30 per cent lower than they are now.
But ask me today, and I’d say that investing in new gas is a poor choice, risking stranded asset write-offs for shareholders and worsening climate change. I wouldn’t spend a cent on it.
At last week’s gas industry conference, organised by gas peak body APPEA, government and fossil fuel executives branded those who oppose gas today “climate activists.”
It’s so easy to throw stones, to deny the reality of a fast changing climate, and a world where renewables and storage now deliver cheaper and cleaner energy than gas.
But quite simply, nothing about new gas stacks up today.
First, grid batteries far outperform gas peaking plants for meeting sudden spikes in power demand, and battery technology grows cheaper and more advanced by the day.
Second, as the world reckons with the urgent need to cut emissions to avoid dangerous climate change, experts – from climate scientists to the famously conservative International Energy Agency – warn there cannot be any new gas, oil, or coal projects.
Third, as our major trading partners adopt net zero emissions targets, the fortunes of Australia’s gas industry are bound to turn—potentially leaving taxpayers to clean up its mess.
You don’t need to look further than the $231 million cost to Australian taxpayers of cleaning up the Northern Endeavour oil platform off WA’s northern coast, or moonscape-like open cut coal mine sites in NSW, Queensland, and Victoria, to see what happens to the environment when fossil fuel companies struggle.
They sell to minnows or even walk away from expensive rehabilitation works, and the bonds they once lodged with governments prove hopelessly inadequate to cover cleanup costs.
Looking at existing gas projects, and those in the government’s purported ‘gas-led recovery’ plans, there will be tens of thousands of gas wells across the country eventually needing similarly expensive rehabilitation.
Will the gas companies talking their book today fund these massive costs when income from gas sales inevitably fall away?
Despite its declining economic prospects and deteriorating social licence, the gas industry clearly still has loyal friends in both the federal government and opposition.
Much has already been said about political donations by fossil fuel companies and the revolving door between government and industry.
Rather than taking the gas industry’s mantra as gospel, our political leaders must stop chasing the short-term sugar hit of regional votes in some marginal electorates, won through fear-mongering and name-calling, and start prioritising the well-being of all Australians.
The Australians on the frontline of climate change-fuelled bushfires, droughts, floods, heatwaves and storms; the families suffering the health consequences of living near coal and gas projects; the farmers struggling with drought; and the gas and coal workers who will need clean new jobs to transition to when the industry’s fortunes turn.
The good news is, Australia has everything it needs to tackle climate change and become a renewable energy superpower, driving our own economy with clean energy while seizing market opportunities for low-carbon products in a global net zero world. We could unlock thousands of new jobs, cheaper electricity and new industries for the future.
Unfortunately, it’s clear that right now, while the world turns to capturing future opportunities, Australia is stubbornly digging in, facing mounting economic and climate risks with each day of inaction.
When working on big energy projects, which at times faced delivery challenges to budgets and schedules, I remembered an old adage: “When you are in a hole, the first step to turning things around is to stop digging!”
As a former energy executive, and an Australian, that’s my message for our politicians: Stop digging, and start leading us out of the fossil-fuelled hole our economy risks disappearing into.
Andrew Stock is an energy executive with 40 years experience and a Climate Council spokesperson.