Only gas can meet the Paris Agreement


Victorians know what the real war is:

Victorian voters are more inclined than those in other states to believe there is a strong possibility of blackouts in the transition to net zero, that energy costs are higher, and that gas has a role to play, despite their government’s anti-gas stance.

The Redbridge EnergyShift tracking poll – conducted in May and compared with the same questions asked of voters in February – shows Australians in all states overwhelmingly prioritise cost and reliability in the shift to lower-emissions energy generation, and remain sceptical about the ability of the federal government to meet its greenhouse gas emission reduction targets.

The Victorian government’s controversial gas substitution road map saw gas connections to new homes banned on January 1, and Energy and Resources Minister Lily D’Ambrosio has publicly disagreed on multiple occasions with federal resources counterpart Madeleine King over the role of gas in the energy transition.

Mad King’s gas strategy said nothing about domestic reservation and she has steadfastly refused to intervene with the latent ADGSM to bring down runaway prices:

The Coalition is also going to privilege gas extraction, most notably in Victoria, yet, again, there is no mention of gas domestic reservation for the East Coast.


This is utterly pointless if either party wants to influence price.

So long as the East Coast gas cartel is free to ship endless quantities of gas offshore, price relief in Australia will not arrive unless it arrives worldwide.

The good news is that a massive global glut is building through 2030, so there will be some price relief.


But that’s hardly the point. Local prices will remain the highest globally unless or until an East Coast reservation regime is developed or the current system is implemented.

It is also not good enough to do it on a project-by-project basis. The export cartel can shift gas portfolios to ensure the local shortage is intact.

We need 200Pj of gas currently exported to be held in reserve locally. This is roughly 15% of current exports and the same proportion the WA reservation system holds back.


Break some export contracts with China. It doesn’t even need the gas and we do, desperately:

If we do that, gas prices will halve, electricity prices will crater, and the energy transition will accelerate as coal exits immediately. Given the security of supply in firming power, the renewables rollout will also hasten.


Instead, we have both parties crawling to the cartel for more gas production while delivering nothing to consumers or the climate.

The result will be publicly subsidised coal for longer, breaking the Paris Agreement:

Australia will breach the Paris Agreement on climate change regardless of who is in power, the Coalition’s energy spokesman has claimed.


Shadow Energy Minister Ted O’Brien says a promised 43 per cent reduction in emissions by 2030, which Australia committed to under the Paris Agreement, cannot be met — constituting a breach of the agreement.

Australia, like almost every nation in the world, provides a commitment to cut emissions to the United Nations once every five years, and that commitment can only be made more ambitious over time, not weakened.


But new modelling by Monash University’s Climateworks Centre has found that even with a faster-than-expected uptake of EVs, a failure to also change how people and goods travel will mean transport emissions overshoot the reductions necessary for Australia to meet the Paris Agreement goal of limiting global warming to 1.5 degrees.

“To date, we’ve put all our eggs in that EV basket,” said Climateworks’ transport program lead, Helen Rowe. “Australia will struggle to reach [its climate goals] if we don’t diversify the solutions.”

Gas peakers can be built in two years. All coal could be gone in three years, and Australia could reach its target.

Canberra’s real climate war is to protect the gas export cartel, no matter the consequences.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.