In May 2021, the preceding Australian prime minister, Scott Morrison, announced that his government would spend up to AUD $600 million on a new gas-fired power plant in Hunter Valley, New South Wales. This is despite that the Australian energy board chair says that this “doesn’t stack up. This is just one of many new gas projects under development in Australia that are coming under fire for being environmentally and economically damaging.

Despite promises to take more action on climate, the new Labor government supports these new polluting gas projects. But, these will “fast track” climate change, said Richie Merzian, Director of Climate & Energy from The Australia Institute. “When we know fossil fuels are the major contributor to climate change, Australia is actively making a global problem worse and the UN Secretary-General has called investment in new coal or gas projects moral and economic madness”, he said.

Natural gas in Australia is neither a cheap source of energy nor a clean one. So, why do successive federal governments keep promoting it?

What is natural gas energy?

Natural gas is a fossil-fuel energy source mostly made up of methane. It also contains gases such as carbon dioxide and water vapour in small amounts. We use it as a fuel and to make materials and chemicals.

How does natural gas produce energy?

There are two main ways that natural gas is used to make electricity. An open cycle power station burns natural gas to produce pressurised gas, which spins the blades of a turbine connected to a generator. Magnets spin inside the generator as a result, creating electricity. A combined cycle power plant uses the waste heat to boil water and produce steam, which drives another turbine and thus generates more electricity. This allows combined cycle stations to generate around 50 per cent more electricity.

Why is natural gas bad for the environment?

There are advantages to using natural gas over a fuel like coal. However, overall it can worsen climate change. Scientists estimate that gas-fired electricity emits about 50 per cent less carbon dioxide than coal to produce an equal amount of energy. But, that is not the whole story.

Natural gas is mostly methane, a powerful greenhouse gas that is about 90 times worse than carbon dioxide over a 20 year period. It can trap far more heat for a shorter period of time. As a result, there are numerous concerns related to natural gas.

Firstly, the extraction, production, transportation and conversion of natural gas into liquefied natural gas release methane. Also, abandoned oil and natural gas wells release methane. In fact, they accounted for nearly 30 per cent of total US methane emissions in 2018.

Moreover, the whole process requires a lot of electricity. This all produces a lot of greenhouse gas emissions, in addition to when it is burned for energy. That is why scientists say that Australia is releasing about 10 per cent more greenhouse gases than earlier estimates.

Plus, when natural gas is used and subsidised instead of renewable power, it slows down the development of cleaner energy sources.

Is natural gas cheaper for Australia?

The government’s investment into the 660 MW plant in New South Wales illustrates how gas offers Australians a bad deal. Australia’s Energy Security Board chair said that the power plant made little commercial sense, given the abundance of cheaper alternatives. “[T]here are a whole lot of other things around that are cheaper in price, like wind, solar and big batteries, like pumped hydro and we’ve got Snowy 2.0 coming”, she said.

A few years ago, natural gas may have been the cheapest energy source available to Australians. However, that is no longer the case. Over the past two decades, nearly three million Australian homes have installed solar panels. An all-electric new-build home with rooftop solar and no gas appliances could save households in Western Australia up to AUD $10,500 on energy over 10 years, one study found. 

Australia’s national science agency says that solar and wind continue to be the cheapest energy source in the country. Even in Western Australia, where gas prices are lower, solar power has boomed. Around the world, the cost of solar and wind power has fallen by over 90 per cent since 2009. That has made it the cheapest form of power across most of the world. In other words, natural gas is not cheaper for Australians, nor is it a long-term solution.

Why is the Australian government promoting gas?

For years, natural gas in Australia came as a by-product of crude oil production off the southern coast. As the oil ran out, so did cheap gas. The Scott Morrison government claimed that natural gas could help Australia with its coronavirus recovery in two ways by:

  1. Helping to reduce prices and protecting jobs within industries that rely on gas, such as chemicals,
  2. Having gas as a cleaner alternative to coal power. Albanese’s Labor government is continuing to back the gas industry. But, this reasoning will cost Australian taxpayers dearly. Developing new gas fields will require massive subsidies from public money. Also, it will require spending on new pipelines to transport the gas around the country. 

At a time when clean renewable energy is becoming increasingly more affordable, private investors are less willing to invest in gas. Instead, they want to invest in large solar and wind farms. For the same reason, using gas for Australia’s energy needs makes little sense. Even worse, it locks Australia into a cycle of burning fossil fuels at a time when the rest of the world is moving on.

In August 2020, 25 eminent Australian scientists wrote, “The rapid rise in methane emissions is due to the expansion of the natural gas industry. The rate of methane leakage from the full gas economy, from exploration through to end use, has far exceeded earlier estimates”. It is time we heed their call. It makes environmental and commercial sense.