This discussion paper responds to the Australian Government's Future Gas Strategy (the Strategy), which sets out the Albanese Government’s plan for gas production and consumption in Australia between now and 2050. The paper argues that the Strategy fails to justify gas expansion and would in fact be more consistent with calls for a comprehensive energy transition strategy for the southern regions.

The Strategy presents two basic rationales for expanding gas production: that more gas-fired generation capacity is needed to facilitate the transition to a renewable grid, and that more gas production is required to address potential shortfalls in domestic supply. This paper argues that neither of these rationales are supported by evidence.

This paper proposes that a third, unspoken rationale underpins the Strategy’s repeated claims that gas will be needed to power the growth of Australian manufacturing: the idea that it is in Australia’s economic interest to continue producing gas and selling it to the rest of the world. 

Key points

• The level of domestic gas consumption outlined in the Strategy would make it impossible to achieve net zero emissions by 2050 — a direct contradiction to official government policy.
• In comparison to massive LNG exports, the potential gas supply gaps in Australia are relatively small. 
• Developing more gas in Western Australia, Queensland or the Northern Territory will do nothing to address pipeline capacity issues.
• Addressing the pipeline issue requires increasing pipeline capacity or reducing the demand for gas through the existing pipeline. 
• Reducing demand through the pipeline involves either cutting overall gas demand or developing more gas in the Southern Regions. 
• Since the shortfall is relatively small, the sensible option is to manage and reduce gas demand in the Southern Regions in line with the Government’s commitments to net zero.