Page 12 - AsianOil Week 45

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Australian upstream finds itself

increasingly isolated politically

POLICY THE Australian upstream is struggling to find
support on either side of the parliamentary
divide for its vision of the country’s natural
gas future.
On the one hand, the Australian Petro-
leum Production and Exploration Association
(APPEA) has decried the government’s plans
for a “gas-led recovery” that will see greater state
involvement in shaping energy production and
consumption.
On the other hand, the opposition Australian
Labor Party (ALP) has just ousted its most prom-
inent backer of greater gas consumption, with
Joel Fitzgibbon quitting his position as shadow
resources minister in the wake of a heated feud The Australian upstream may not be happy
with ALP leader Anthony Albanese. with the government’s chosen direction over
APPEA chief executive Andrew McConville energy security, but the opposition’s stance has
said a November 11 speech that the govern- been hardening towards the energy industry in
ment’s pledge to revisit plans for domestic gas recent months.
reservation, the renewal of export controls and A rift in the ALP’s ranks that opened when
promises of government backing for strategic Fitzgibbon publicly backed Morrison’s plans is
projects could derail the industry’s recovery. closing following the pro-gas MP’s return to the
“Even before the onset of the [coronavirus] back benches on November 10.
COVID-19 pandemic, oil prices had begun Fitzgibbon resigned his position after a
to fall sharply and this was exacerbated by the shadow cabinet meeting on November 9 report-
global pandemic,” the Australian Financial edly descended into a blazing row over the par-
Review (AFR) quoted McConville as saying. ty’s stance on climate change. The AFR quoted an
“The shutdown of industry and businesses the unnamed source the following day as saying that
world over and billions of people living in lock- Albanese and Fitzgibbon were “going hammer
down decimated demand for oil and gas. Oil and tongs” over climate policy issues, with others
prices fell more than 75% in the first four months at the meeting left “looking for a hole to climb in”.
of 2020. Prices now are still well below pre-pan- Fitzgibbon has long been at odds with the
demic levels.” party’s increasingly tough stance on climate
He noted that investor confidence was low change and has advocated greater support for
and much-needed capital for new projects in the gas industry. That split is what was report-
short supply. As such, he urged Canberra to edly behind the ALP’s move earlier this month to
remove the AUD5bn ($3.63bn) turnover cap draft an agreement unifying the party’s opposing
governing eligibility for the business investment viewpoints.
allowance outlined in the financial year 2021- While the ALP leadership was understood to
2022 budget. have agreed to backed gas as a key piece of its
The executive’s comments follow Prime Min- plan for Australia to reach net-zero emissions by
ister Scott Morrison’s announcement in Septem- 2050, it also agreed to criticise the “gas-led recov-
ber of plans to “reset” the East Coast gas market ery” in favour of renewable energy solutions.
by encouraging both upstream and mid-stream It is clear APPEA will miss Fitzgibbon’s
development. Morrison said his government influence within the ALP, publicly saluting his
would work with state and territory govern- “passionate advocacy of the resources sector” on
ments to set new gas supply targets and enforce November 11. Indeed, McConville even called
potential “use-it or lose-it” requirements on gas the former shadow resources minister “a cham-
licences. Moreover, he committed to exploring pion for resources”.
options for a prospective gas reserve scheme “Mr Fitzgibbon has stood up for the resources
while seeking new agreements with Queens- industry as a key driver of the economy. It is an
land’s three liquefied natural gas (LNG) projects industry that provides significant wealth and
to “strengthen price commitments”. investment for the nation and enables govern-
But McConville bemoaned the govern- ments to deliver health, education and infra-
ment’s “increasing intervention” over sup- structure commitments required for a modern
ply-side issues, saying: “If industry confidence is economy,” McConville said. “Joel understood the
impacted it will lead to less investment and less importance of an orderly transition to a cleaner
supply – the opposite of what is needed.” energy future, and the key role gas plays.”™

P12 www. NEWSBASE .com Week 45 12•November•2020