Gas infrastructure support sought for Australia economy

The Australian government has been advised to support gas infrastructure projects as part of a plan to boost the economy in the wake of the Covid-19 pandemic. This is part of a strategy to boost gas supplies for gas-fired firming power plants and for fertilizer and petrochemical plants.

Federal support for gas infrastructure has not been formally advised and Canberra has made no official comment yet on the proposal. But the role of gas in any post-Covid-19 recovery plan has been highlighted by the National Covid-19 Commission Advisory Board set up by prime minister Scott Morrison earlier this year to provide advice on economic recovery policies.

The commission has given little detail about its economic recovery plans, but chairman Nev Power gave some insight into the commission's thinking when he spoke at an Australian Senate hearing in Canberra this week. Power is a director of Australian independent Strike Energy, which has gas interests in Western Australia and in east Australia.

"The only area where we recommended specific support from government, and that's not necessarily subsidy but, rather, about facilitating the capacity of that infrastructure to ensure that it is future proofed for increased demand," Power told the Senate Select Committee on Covid-19.

A significant component of the cost of gas on the east coast of Australia delivered into households, particularly in the south, is the cost of transportation, said Power.

The commission had looked at several business areas for the role of gas such as in the fertilizer and petrochemical sectors, Power said. Australia imports fertilizers and petrochemicals and the commission was looking specifically at gas as a feedstock to those manufacturing industries, as well as an energy source to a variety of other manufacturing businesses, including steel mills, refineries and food processing systems, he said.

There is a substantial amount of gas used as a heating fuel, as well as a feedstock to those manufacturing businesses, Power said. "Part of the recommendation was that we needed to provide more supply to reduce the cost of gas into those manufacturing businesses to maintain existing businesses and jobs that are already there in those industries and encourage further investment and expansion in those industries, particularly around fertilizers and petrochemicals."

The commission also looked at the use of gas as a back-up fuel for the increasing share of renewables into the Australian electricity generation system.

By Kevin Morrison