Australia’s oil and gas industry has called on the government to use the Federal Budget to urgently unlock new gas supply to avoid forecast shortages, put downward pressure on prices, and secure the economic and emissions reduction benefits of the nation’s abundant natural gas resources.

In its 2024-25 Federal Budget submission, Australian Energy Producers (formerly APPEA) has called for a plan to avoid looming shortfalls on both the east and west coasts, and to continue delivering affordable and reliable energy for homes and businesses.

Australian Energy Producers (AEP) chief executive Samantha McCulloch said: “After more than a year of policy instability, government interventions and project approval delays, a recalibration of the policy and investment environment for natural gas is needed to secure our energy future.”

With no release of new acreage for petroleum exploration since August 2022, the industry has called for that round to finally be awarded and the long overdue acreage releases, typically held annually, to resume.

Meanwhile, the government should outline a plan to incentivise new gas supply ahead of the scheduled 2025 review of the Code of Conduct.

“The release of new offshore petroleum exploration acreage is long overdue, and this annual process needs to get back on track to maintain our domestic and regional commitments,” she said.

AEP’s submission highlights the important long-term role natural gas will play in Australia’s energy transition to net zero, as well as the growing opportunities for liquefied natural gas exports to support regional emissions reductions.

“We have proposed the establishment of an Australian LNG Producer-Consumer Taskforce to strengthen regional relationships and ensure Australia benefits from a potential 10-fold growth in Asian LNG demand,” added McCulloch.

“We are calling on the Federal Government to work with gas producers, energy users and state governments on an Action Plan to bring on new supply to address near-term structural shortfalls.”

AEP’s key recommendations intended to restore investor confidence for new gas supply include fixing the regulatory uncertainty and delays for offshore gas projects, streamlining environmental approvals in the Environment Protection and Biodiversity Conservation (EPBC) Act reforms, implementing taxation and fiscal policy settings that support investment in new gas supply, and the removal of pricing controls and return to market signals for the east coast gas market to secure investment in new supply.

“Whether it’s through streamlining environmental approvals or fixing the broken offshore regulatory system, Australia needs to move quickly to secure the economic, energy security and emissions reduction benefits of natural gas,” she said.

The submission also calls for Australia to be a regional carbon capture, utilisation and storage (CCUS) hub — including developing a national roadmap and creating Net Zero Zones to fast-track emissions reductions.

The industry association also recommended that the government develops a CCUS roadmap to support the scale-up of CCUS technologies, ensures that the National Hydrogen Strategy recognises and incentivises hydrogen from natural gas with CCUS as part of the nation’s future low-carbon hydrogen mix, supports the creation of Net Zero Zones to reduce the costs and fast-track emissions reductions in hard-to-abate industries, and develops emissions policies that recognise the need for new gas supply to achieve net zero by 2050.

“Carbon capture is part of the net zero pathway in a multitude of ways — such as lowering emissions from industries, unlocking low carbon hydrogen and supporting carbon removal,” concluded McCulloch.

“It can also be a major economic driver for Australia through new jobs and investment.”