Gas exporters on notice to lock in more supplies for Australians
Oil and gas executives have been put on notice that the re-elected Albanese government will make them do more to avert local energy shortfalls, as Resources Minister Madeleine King warns Australians are 'tired of seeing our vast gas resources exported overseas' while paying high prices at home.
While some of the nation's top gas producers make billions of dollars shipping liquefied natural gas (LNG) overseas from Queensland, authorities warn consumers in the south-east, including Victoria and NSW, are at risk of gas shortages in as little as three years unless more supplies are urgently made available.
'Australians recognise this to be unfair,' King told industry leaders gathered at the Australian Energy Producers conference in Brisbane.
'The Australian gas industry should pay careful attention to public concern of rising gas prices and supply gaps.'
However, Kevin Gallagher, the head of Adelaide-based gas giant Santos, has pushed back against the threat of another wave of heavy-handed regulatory scrutiny, warning that ad-hoc government interventions to fix supply and prices have all 'backfired' so far. 'They've had the opposite impact that was intended,' he said.
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The threat of domestic gas shortfalls comes as the 50-year-old Gippsland Basin gas fields in Bass Strait, which have traditionally provided the bulk of eastern Australia's domestic gas, have begun rapidly depleting, with scant new supply projects to replace them, sending prices higher.
Some Australian LNG producers were 'doing the right thing' in ensuring the market had enough gas, added King, who pointed to agreements struck this year to divert an extra nine petajoules of gas to stave off a quarterly supply deficit. 'I thank them for that,' she said.
'But there remains a lot of work to do to ensure the domestic market remains well supplied.'
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'In today's Australia, the new default should be that patriotism is a love of country that is democratic and egalitarian. It is something that includes those of different races and backgrounds,' he wrote in this masthead a couple of weeks ago. 'With his political authority unquestioned, Albanese has an opportunity to craft a nation-building agenda. The significance is more than just national. At the moment, parties of the centre-left are struggling to find compelling alternatives to Trumpist populism.' Albanese's defiance of America doesn't come out of nowhere. It rings a Labor bell. It resonates with the decision by Labor's celebrated wartime leader, John Curtin, to defy Australia's great and powerful friend of his time, Britain. 'I'm conscious about the leadership of John Curtin, choosing to stand up to Winston Churchill and say, 'No, I'm bringing the Australian troops home to defend our own continent, we're not going to just let it go',' Albanese said last year as he prepared to walk the Kokoda Track, where Australia and Papua New Guinea halted Imperial Japan's southward march of conquest in World War II. Defiance of allies is one thing. Defeat of the enemy is another. In a moment of truth-telling, the Chief of the Defence Force, Admiral David Johnston, this week said that Australia now had to plan to wage war from its own continental territory rather than preparing for war in far-off locations. 'We are having to reconsider Australia as a homeland from which we will conduct combat operations,' Johnston told a conference held by the Australian Strategic Policy Institute. 'That is a very different way – almost since the Second World War – of how we think of national resilience and preparedness. We may need to operate and conduct combat operations from this country.' He didn't spell it out, but he's evidently contemplating the possibility that China will cut off Australia's seaborne supply routes, either because it's waging war in the Taiwan Strait or South China Sea, or because it's seeking to coerce Australia. 'The chief of the defence force is speaking truth,' says Professor Peter Dean, co-author of the government's Defence Strategic Review, now at the US Studies Centre at Sydney University. 'There's a line in the Defence Strategic Review that most people overlook – it talks about 'the defence of Australia against potential threats arising from major power competition, including the prospect of conflict'. And there's only one major power posing a threat in our region.' History accelerates week by week. Trump, chaos factory, wantonly discards America's unique sources of power and abuses its allies. China's Xi Jinping and Russia's Vladimir Putin are emboldened, seeing America's credibility crumbling. British Prime Minister Keir Starmer, alarmed at the rising risks, this week declared a campaign to make Britain 'battle ready' to 'face down Russian aggression'. Loading Starmer plans to enlarge the army, commission up to a dozen new nuclear-powered submarines jointly built with Australia under AUKUS, build six new munitions factories, manufacture 7000 long-range weapons, renew the nuclear warheads on Britain's strategic missiles, and put new emphasis on drones and cyberwar as war evolves daily on the battlefields of Ukraine. Starmer intends to increase defence outlays to the equivalent of 2.5 per cent of GDP with an eventual target of 3 per cent. Ukraine's impressive drone strike on Russia's bombers this week knocked out a third of Moscow's force, with AI guiding the drones to their targets. The Australian retired major-general Mick Ryan observes that Ukraine and Russia are upgrading and adapting drone warfare weekly. 'The Australian government has worked hard to ignore these hard-earned lessons and these cheaper military solutions,' he wrote scathingly in this masthead this week, 'while building a dense bureaucracy in Canberra that innovative drone-makers in Australia cannot penetrate in any reasonable amount of time.' At the same time, the FBI charged two Chinese researchers with attempting to smuggle a toxic fungus into the US. It's banned because it can cause mass destruction of crops. A potential bioweapon, in other words. What would John Curtin do today? 'Curtin, like Albanese, was from the left of the Labor Party,' says Dean. 'He was not an internationalist, he was very domestic focused.' Indeed, he was an avowed Marxist who believed that capitalism was in its late phase and bound to fail, leading to world peace. He abandoned his idealism when confronted by the reality of World War II. 'He realised that a leader has to lead for his times. He had to bend his interests from the domestic sphere to the international.' Curtin famously wrote that, after Britain's 'impregnable fortress' of Singapore fell to the Japanese in just a few days, Australia looked to America as its great and powerful friend. 'Albanese can't repeat that,' observes Dean, 'because there's no one else to turn to.' 'A modern John Curtin,' says the head of the National Security College at ANU, Rory Medcalf, 'would take account of the strategic risk facing the unique multicultural democratic experiment of Australia. He'd unite the community and bring the trade unions, industry, the states and territories together in a national effort. 'It's certainly not about beating the drums of war, but we do need a much more open conversation about national preparedness. Australia might be directly involved in war, but, even if we aren't, we will be affected indirectly [by war to our north] because of risks to our fuel security, risks to the normal functioning of the economy and risks to the cohesion of our society. Is there scope to use national cabinet' – which includes the states and territories – 'to talk about these issues?' And the defence budget? Albanese is dismissive of calls to peg spending by set percentages of GDP. Apply that to any other area of the budget and you'd be laughed out of the room. The prime minister prefers to decide on capability that's needed, then to fund it accordingly. How big a gun do you need, then find money to pay for it. Medcalf endorses this approach of deciding capability before funding, but says that risk should come before both. 'And if you look at risk first, it will push spending well above 2 per cent of GDP and much closer to 3 or 4 per cent.' Regardless of what the Americans say or do. Do they turn out to be dependable but demanding? Or uselessly absent? 'Australia will need to spend more either way,' says Medcalf. 'The only future where we don't need to increase our security investment is one where we accept greatly reduced sovereignty in a China-dominated region.'
