The Australian government has unveiled its plans to finalize new offshore exploration permits for natural gas, aiming to bolster renewable energy stability and foster economic growth as the nation moves toward net-zero emissions.
Approval for New Exploration Projects
Minister for Resources and Northern Australia, Madeleine King, will sanction permits for Esso and Beach Energy in the Otway and Sorrell Basins. The gas discovered through these permits will be allocated to support the domestic east coast market.
In addition, exploration permits will be issued to Chevron, INPEX, Melbana, and Woodside Energy on Australia’s west coast to strengthen energy security in Western Australia.
Carbon Capture and Storage Permits
The government will also finalize 10 permits for carbon capture and storage exploration, highlighting the technology’s crucial role in the net-zero transition.
This move comes in response to concerns about possible gas supply shortages. The latest ACCC Gas Inquiry Interim Report suggests that the domestic East Coast market could face shortages as early as 2027, with potential supply issues continuing into the mid-2030s unless new sources are found.
Gas’s Role in the Energy Transition
Minister King stressed the ongoing necessity of gas during the transition: “As older coal-fired power generation units are retired, gas will remain essential to stabilize renewable energy production and provide backup during peak demand periods.
“While gas is crucial for the transition, its role will diminish as other storage technologies become available by 2050.”
Future Gas Strategy
The government’s Future Gas Strategy focuses on achieving net-zero emissions by 2050, while also recognizing the need to secure gas supplies to meet domestic needs during the transition.
Since the current government took office, there has been a 25% increase in renewable energy generation within the National Electricity Market, leading to record lows in both total emissions and emissions intensity.
Exploration Permit Limitations
It is essential to note that the approval of offshore exploration permits does not automatically authorize new gas production.
Additional safety and environmental approvals will be required from Australia’s National Offshore Petroleum Safety and Environmental Management Authority.
Moreover, further community consultation will be needed before any offshore exploration activities can commence.
Mixed Reactions to the Decision
The announcement has received varied responses. Samantha McCulloch, Chief Executive of Australian Energy Producers, welcomed the move, asserting that exploration is vital for supplying the natural gas necessary to support industry, renewable energy, and expedite the coal phase-out.
On the other hand, climate advocates have raised concerns. Dr. Jennifer Rayner from the Climate Council argues that Australia should focus on innovative policies, such as a domestic gas reservation policy, rather than approving additional gas projects.
Balancing Energy Security with Environmental Goals
As Australia advances toward its net-zero emissions target, the government’s strategy seeks to balance the need for energy security with environmental considerations, emphasizing the transitional role of gas while promoting the expansion of renewable energy sources.