Albanese Government Takes a Big Gamble on Gas as a Safety Net for Net Zero Goals

The Australian Labor government is pushing for the development of new gas fields to support its goal of achieving net zero emissions by 2050.

The new Future Gas Strategy aims to facilitate the clean energy transition of the economy while ensuring energy affordability and security. It also seeks to enhance the country’s trade and investment reputation to attract investors.

“Securing reasonably priced gas access in Australia is crucial for transitioning to an 82 percent renewable energy grid by 2030 and achieving our net zero emissions commitment by 2050,” stated Resources Minister Madeleine King.

“The strategy emphasizes the continued importance of gas as an energy source beyond 2050, with its applications evolving as we enhance industrial energy efficiency, stabilize renewables, and reduce emissions.”

Last year, LNG was Australia’s third-largest export, generating 14 percent of export revenue and supplying around 20 percent of global LNG consumption. Major LNG projects in Western Australia are led by Chevron and Woodside Energy Group.

Key components of the strategy include the Scarborough LNG project in Western Australia and the Beetaloo Basin in the Northern Territory, both of which are still awaiting approval and facing opposition from environmental activists.

Other key principles outlined in the strategy include the acquisition of new gas sources and transitioning to higher-value and irreplaceable gas applications.

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David Shoebridge, Greens senator for NSW, criticized the move, saying on X that it is ‘a criminal decision from Labor to push for new climate-smashing gas mines.’

Nic Seton, CEO of Parents for Climate, viewed the strategy as a betrayal to children who rely on their parents to shield them from the consequences of high living costs and extreme weather events.

Mr. Seton stated, “Parents expect the government to act in the best interests of our children, but this plan prioritizes big gas companies over our kids. This will result in long-term consequences for our children, leading to community harm, increased insurance costs, and threats to food security.”

He argued that the strategy mirrors the intentions of the previous Morrison government’s gas-fired recovery plan, promoting new gas extraction fields, which the Labor Party previously criticized while in opposition.

Josh Runciman, lead gas financial analyst at the Institute for Energy Economics and Financial Analysis (IEEFA), stated that the costs of the strategy outweigh its potential benefits.

According to IEEFA research, implementing cost-effective measures to reduce residential gas demand can address supply shortfalls, particularly in southern Australian states, while lowering household energy bills.

Mr. Runciman said, “Our research indicates that further gas exploration and development are unnecessary. Gas exploration expenditures have been declining over the past decade as gas companies pivot towards renewable investments or returning cash to shareholders.”

Despite positive advancements in the LNG industry, IEEFA research suggests that LNG demand will decline until 2035, with contract volumes projected to be less than half of those in 2024, eliminating the need for additional supply.