Australian Government backs gas
Australia’s Federal Government has released its Budget for 2020-21, highlighting gas as a critical component of its economic recovery from the COVID-19 pandemic. As well as fast-tracking exploration for new gas resources, the Government is establishing an inaugural National Gas Infrastructure Plan, a new gas hub and has hallmarked new investments in gas infrastructure.
The primary role of the National Gas Infrastructure Plan will be to identify priority infrastructure projects, and it also includes options to boost the existing Wallumbilla Hub into a more transparent Australian Gas Hub, like the Henry Hub in the United States.
In addition to the $42 million of investments to unlock supply, $10.9 million will be invested to strengthen gas infrastructure planning and deliver market reform to lower the price of gas for households and manufacturers.
Australian Prime Minister Scott Morrison emphasised the importance of gas in Australia’s economic recovery, particularly for the manufacturing sector.
“If you’re not for gas, you’re not for jobs in our manufacturing and heavy industries. For many manufacturers, access to affordably priced gas is half the problem.”
Prime Minister Morrison also noted that the Government’s National COVID-19 Coordination Commission (NCCC), established to chart the course to economic recovery after the pandemic, has reported that gas makes up 20-40 per cent of many industries’ cost structures.
“Combined with higher electricity costs, the NCCC said that gas costs have moved many firms into a ‘doom loop’ where they are living turnaround to turnaround, making existential decisions at each point of the next major maintenance decision, rather than decisions to invest in technology and much-needed productivity improvements to remain competitive,” Mr Morrison said.
“This needs to change. That is why, as part of our gas-fired recovery plan, we have committed to resetting our east coast gas markets, unlocking gas supplies, establishing a new gas hub and improving our gas grid distribution systems.”
The Federal Government is also helping to unlock five key gas basins, starting with the Beetaloo Basin in the Northern Territory and the North Bowen and Galilee Basins in Queensland, to help meet these gas demands.
Modern Manufacturing Strategy
Gas will also play a critical role in the $1.3 billion Modern Manufacturing Strategy, another centrepiece of the Budget, which will target six national manufacturing priorities:
- Food and beverage manufacturing
- Resources technology and critical minerals processing
- Medical products
- Recycling and clean energy
- Defence industry
- Space industry
The backbone of this plan is enabling Australian manufacturing businesses to be globally competitive through cheaper and more reliable energy.
In his Budget speech in Federal Parliament, Treasurer Josh Frydenberg said, “More gas at a lower price will support jobs in Australia’s manufacturing sector.
“Affordable and reliable energy will be critical to Australia’s future economic prosperity.”
Under the Modern Manufacturing Strategy, the government and industry will partner to develop industry-led roadmaps to determine growth opportunities, barriers to scale-up and value chain requirements.
These roadmaps are to be prepared by April 2021, and will act as guides for investment for both government and industry.
An opportunity for investment
With Australia’s gas industry being earmarked as a pivotal component of Australia’s economic recovery, and with the full support of the Federal Government, now is an opportune time to get involved in the Australian gas market.
Powered Australia has the experience and expertise needed to help companies reach new levels of sales performance in the Australian oil and gas, resources, and mining sectors. Powered Australia is here for a confidential discussion about the opportunities down under has to offer.