New Report Warns that Green Energy Plan Could Have Negative Impact on Economy

The study by EnergyQuest consultancy suggests that adhering to the Greens’ renewable energy policy could lead to “blackouts for millions of homes and businesses in southeastern Australia in as little as two years,” with a cessation of gas supply investment also causing harm to the economy.

This report was commissioned by Australian Energy Producers, the leading organization representing Australia’s oil and gas sector.

The Greens are pushing for an immediate halt to the construction of new coal, oil, and gas infrastructure, arguing it will facilitate the transition to a zero-carbon energy economy while ensuring a safe climate.

They believe that by investing in wind power, solar energy, and energy storage, as well as upgrading Australia’s electricity grid, the economy can be powered without the need for new gas investment.

However, the study predicts that this move could lead to blackouts, factory closures, and the termination of long-term export contracts in Queensland.

“A discontinuation of gas supply investment would severely impact the economy. Electricity generated from gas on the East Coast could face interruptions within two years and might run out by 2029,” the study stated.

Gas-fired electricity generation will be discontinued in Western Australia by 2032 and in Queensland by 2036, despite projections from the Australian Electricity Market Operator indicating an increasing demand for gas as coal-generated power facilities close down.

Increased International Demand

Based on a study earlier this year by Rystad Energy, LNG demand in the region is expected to nearly double from 252 million tonnes per annum (mtpa) in 2022 to 450 mtpa by 2032.

This means that Australian projects, due to their close proximity and established relationships, continue to be appealing to buyers in Asia.

The primary demand is anticipated to come from China, followed by Southeast Asia and South Asia, with new buyers emerging from legacy markets in Japan and Korea.

If Australia were to shut down its LNG industry, it would miss out on potential earnings from this demand. The country would also fail to meet its existing international LNG contracts, resulting in job losses in the manufacturing sector.

“New export projects are crucial for delivering economic benefits such as an estimated $17 billion in government receipts this fiscal year and $41 billion in industry spending in Australia. Our LNG can also help reduce emissions in importing nations by facilitating the transition from other fuels,” stated Samantha McCulloch, Chief Executive of Australian Energy Producers.

“On the contrary, the Greens’ policy would jeopardize energy security, drive up energy costs, and prolong the dependence on coal—both in Australia and for our key trading partners—ultimately leading to increased emissions and hindering the energy transition.”

Even disregarding the international market, the industry body asserts that investment in new gas supply is urgently required to meet domestic demand.

“The Future Gas Strategy indicates that gas will be necessary for the Australian economy until 2050 and beyond,” added McCulloch.

The government’s gas strategy involves utilizing gas beyond 2050, despite Australia having a legislated target of achieving net zero greenhouse gas emissions by that time.

However, the government also cautioned that coal and gas emissions could increase by 1.7 billion tonnes by 2050 if their usage is extended for another 15 years.

If Labor ends up in a minority government post the upcoming election, it may face pressure to comply with the demands of the Greens and most Teal MPs, who support the proposal.

Greens leader Adam Bandt criticized big gas corporations for evading taxes while sending gas and profits abroad, stating, “Gas is as harmful as coal, and the gas corporations are spreading misinformation because they’re aware that the Greens will hold them accountable for paying their fair share of taxes to the Australian people in a power-sharing parliament.”