“Conditions are already tight for many domestic gas users who are still reeling from a three-fold increase in gas prices,” the Energy Users Association of Australia’s Andrew Richards said. “They are looking for the ACCC to help level the playing field, but this decision seems to reinforce the status quo.”
LNG is one of the nation’s largest export commodities, accounting for $32 billion in export revenue in the past financial year. The federal government expects this to increase sharply in the coming 12 months to $49 billion.
However, oil and gas companies are also facing escalating pressure on climate change and the prospect of demand for their commodities falling faster and steeper in the future than previously expected. While natural gas is helping to reduce emissions in parts of the world by displacing coal-fired power, the International Energy Agency recently released a landmark report in May that warned investors must avoid funding any new oil and gas fields for the world to achieve the Paris accord’s aspirational goal of limiting global temperature rises to 1.5 degrees.
The Climate Action 100+ coalition backed by 575 institutional investors last month described the fresh forecasts around the speed of emissions cuts required to slow global warming as a “game changer”.
“We engage with companies right across all sectors of the Australian economy .. and 90 per cent of the questions we are getting at the moment on climate are about oil and gas companies,” Climate Action 100+ director for Australia Laura Hillis said. “This is a really topical issue.”
Industry leaders in Australia say they recognise society’s accelerating climate demands and the risk of being shunned by equity investors and lenders without strong climate commitments. Still, they have voiced confidence in robust future demand underpinning new growth projects in Australia, as large Asian customers continue turning to LNG for a reliable and comparatively less-emitting energy source.
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