Peter Dutton's Bold Move: Reviving Morrison's 'Gas-Fired Recovery' to Slash Energy Bills Ahead of Election

The Coalition aims to boost gas supply and ease regulations to lower power prices, a strategy likely to intensify tensions with teal independents, who may oppose such measures for environmental or economic reasons.

P24 News Media

December 17, 2024

1 minute

Peter Dutton's Bold Move: Reviving Morrison's 'Gas-Fired Recovery' to Slash Energy Bills Ahead of Election

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The Coalition is gearing up with a pre-election initiative aimed at significantly boosting the domestic gas supply, which includes plans for less stringent regulations. This strategy aims to reduce energy costs for both households and businesses, providing a counter-narrative to Labor's expected approach of ongoing direct energy bill support for consumers.

The promise to the electorate emerges after extensive discussions with the gas sector. It is designed to create a contrast with Labor's energy policy, particularly in light of the Coalition's support for future nuclear energy, which, despite its long-term potential, does not offer immediate relief for rising energy costs. The Coalition acknowledged that its nuclear energy strategy would not result in operational reactors until the next decade, leaving a gap in short-term solutions for energy price reductions.

Insiders informed the ABC that pivotal announcements regarding gas will be made, establishing a distinctive position relative to Labor's energy strategy. Proponents of gas highlight its lower carbon emissions compared to coal and its capacity to stabilize energy supply during periods when renewable sources are unreliable, especially as coal generation is expected to diminish in the next ten years.

Peter Dutton articulated the importance of gas in the energy landscape, advocating for accelerated development of projects like Narrabri in New South Wales to enhance supply. "There's an urgent need for gas," he stated, emphasizing the Coalition's commitment to exploring new gas fields while advocating for expedited timelines for bringing these resources online.

National leader David Littleproud echoed this sentiment, suggesting that a comprehensive gas strategy will be part of their announcements aimed at reducing household energy expenses. He pointed out that the most straightforward way to curtail energy prices is to increase supply, making a strong case for rapid incorporation of gas into the market.

The opposition's focus on a refreshed gas policy coincides with Labor's contemplation of continuing existing energy relief programs. Labor has also revised its stance on gas following its earlier reluctance to acknowledge its role in the energy transition, culminating in the release of its "Future Gas Strategy," which underscores the importance of gas in achieving net-zero goals.

During a recent press conference in Brisbane, Dutton responded to inquiries about the nuclear plan's ability to reduce electricity costs, stating that further announcements regarding their energy policy would clarify their short-term strategies. He noted the urgency of providing assistance to families facing soaring costs, warning that three more years of a Labor-Greens government could lead to unprecedented hikes in electricity and grocery prices.

A senior source within the Coalition confirmed that the gas strategy will indeed form part of their electoral appeal, following Dutton's commitment to being a staunch advocate for the mining and energy sectors. However, Dutton's strong endorsement of gas could create friction with teal independents in key constituencies that the Liberal Party aims to reclaim, especially given that some of these independents have firmly opposed government support for fossil fuel-related enterprises.

Nevertheless, Dutton maintains that increasing gas usage for energy generation is a more fiscally responsible alternative to prolonging the lifespan of aging coal power stations, a strategy pursued by the Labor governments in Victoria and New South Wales. While both major parties agree on the importance of gas in the future energy mix, the Coalition's regulatory relaxation may intensify tensions with teal members, especially those victorious in traditionally safe Liberal seats.

Despite the ongoing debate among climate advocates regarding the emissions from gas compared to coal, the Coalition has historically defended gas as a pivotal player in reducing greenhouse gas outputs. The previous Morrison government put forth a national "gas-fired recovery" initiative in 2021, aimed at incentivizing domestic gas production.

An industry insider noted that Queensland's Surat Basin harbors substantial gas reserves, potentially sufficient to meet both domestic needs and export commitments. The outlet highlighted that flooding the market with gas could realistically drive prices down to below $10 per gigajoule, a significant reduction from the current pricing that fluctuates between $12 and $14.

This volatility was evident during the previous winter when prices spiked to almost $30, significantly affecting wholesale electricity costs. In response to backlash from consumers and businesses regarding soaring gas prices exacerbated by global market shifts, Labor instituted a $12 price cap in late 2022.

Recent modeling pertaining to the Coalition's nuclear strategy indicated that lowering gas prices could mitigate some costs associated with extending the lifespan of coal-fired power plants. Gas prices are of critical importance since coal generators need to transport their fuel from inland locations, often incurring higher costs compared to accessible coal export terminals.

The Coalition is reportedly contemplating various incentives and regulatory adjustments to encourage gas companies to increase domestic supply, possibly including modifications to the Australian Domestic Gas Security Mechanism to promote additional investment in gas exploration projects. This strategy highlights the Coalition's commitment to creating a more favorable environment for gas production while simultaneously addressing urgent energy affordability concerns for Australian households and businesses.