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Australia approves new offshore gas exploration permits to support energy transition

24 Jul, 2024
Australia approves new offshore gas exploration permits to support energy transition



The Australian government has announced plans to finalise new offshore exploration permits for gas supply, aiming to support renewable energy firming and economic growth as the country transitions to net-zero emissions.

Minister for Resources and Northern Australia Madeleine King will approve permits for Esso and Beach Energy in the Otway and Sorrell Basins, with any discovered gas designated to support the domestic east coast market.

Additionally, exploration permits will be granted to Chevron, INPEX, Melbana, and Woodside Energy on Australia’s west coast to bolster energy security in Western Australia.

The government will also finalise 10 permits for carbon capture and storage exploration, recognising the technology’s importance in supporting the net-zero transition.

The decision comes as Australia faces potential gas supply shortfalls.

The recent ACCC Gas Inquiry Interim Report indicates that the domestic East Coast market may experience shortages as early as 2027, with supply challenges potentially persisting into the mid-2030s unless new sources are developed.

Minister King emphasised the ongoing need for gas in the energy transition: “As ageing coal generation comes offline in coming years, gas will continue to be needed to firm renewable energy generation and as a backup during peak energy use periods.

“Gas is critical for the transition. But it will be a diminishing proportion of our energy mix to 2050 as other storage technologies come online”.

The government’s Future Gas Strategy prioritises reaching net-zero emissions by 2050 while acknowledging the need to secure gas supply to meet domestic demand during the transition.

Since the current administration took office, there has been a 25 per cent increase in renewable energy generation in the National Electricity Market, driving both total emissions and emissions intensity to record lows.

It’s important to note that the finalisation of offshore exploration permits does not automatically allow new offshore gas production.

Separate safety and environmental approvals will be required through Australia’s National Offshore Petroleum Safety and Environmental Management Authority.

Furthermore, additional community consultation will be necessary before any offshore exploration work can commence.

The decision has been met with mixed reactions.

Samantha McCulloch, Chief Executive for Australian Energy Producers, welcomed the announcement, stating that exploration is essential for delivering the natural gas Australia needs to power the industry, support renewables, and accelerate the phase-out of coal.

However, climate activists have expressed concerns, with Dr Jennifer Rayner from the Climate Council arguing that Australia should focus on new policy thinking, including a domestic gas reservation policy, rather than approving more gas projects.

As Australia continues its journey towards net-zero emissions, the government’s approach aims to balance the need for energy security with environmental considerations, emphasising the role of gas as a transitional fuel while promoting the growth of renewable energy sources.

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