Exxon Mobil Corp on Tuesday gave a dire warning about the outlook of Australia’s domestic gas supply, joining other gas producers in calling for policy stability and more investment in the sector.
There is an urgent need for new investment in domestic gas supply and infrastructure to provide energy security and affordability for households and businesses, ExxonMobil Australia’s Commercial Director David Berman said in a speech to the Australian Domestic Gas Outlook (ADGO) conference in Sydney.
“Without investment, ExxonMobil Australia estimates by 2030 domestic gas supply available to southern states will decrease by 44%,” Berman said.
Exxon operates the Gippsland Basin joint venture, the biggest single gas supplier into the country’s southern region, which includes New South Wales, Victoria, Tasmania, the Australian Capital Territory and South Australia.
Berman said it takes just months to apply for and receive an onshore and offshore drilling permits in the U.S. but in Australia it can take up to two years.
“Chasing sizably lower domestic gas prices requires significantly shorter regulatory timelines because one third of the gas that will be required by consumers on the east coast between 2025 and 2030 is not in production,” he added.
The Gippsland Basin has the resources to be able to help plug the gap, but final investment decisions to develop that gas have yet to be made, Berman said.
Gas producer Senex Energy’s Chief Executive Ian Davies said Australia’s environmental approval process was killing investment as it takes almost three years for new projects to secure a green light. Davies said the Labor government’s planned changes to its environmental protection law had to ensure the nation’s resources industry remained competitive.
Labor has proposed reforming the Environment Protection and Biodiversity Conservation Act (EPBC) with new legislation and the establishment of an agency to oversee development decisions.
The government has argued the changes should reduce red tape and streamline the project assessment process.
“The 1,009 days it takes on average to approve a resources project under the EPBC act is killing investment in Australia,” Davies told the conference.
Minister for the Environment and Water Tanya Plibersek did not immediately reply to a request for comment.
Senex, owned by South Korea’s Posco International Corp and Hancock Energy, is a Queensland-based gas producer. It had been due to spend A$1 billion ($653 million) on expanding its Atlas project in Queensland’s Surat Basin.
The expansion was put on hold in December 2022 after the government set a price cap on gas sales by east coast producers to reduce soaring power bills for households and businesses.
(Reporting by Scott Murdoch in Sydney; Editing by Christopher Cushing and Sonali Paul)