Australia's New Offshore Gas Exploration Permits: A Step Towards Energy Transition

Australia announced new offshore gas exploration permits for its east and west coast markets to address long-term supply concerns. Despite aiming for net-zero carbon emissions by 2050, Australia sees gas as essential for bridging gaps left by retiring coal plants. The decision has faced criticism from environmental groups.

Australia's government announced new offshore gas exploration permits on Tuesday for its east and west coast markets, aiming to alleviate long-term supply concerns as the nation shifts away from coal-fired power. The centre-left Labor government views gas as crucial for transitioning to cleaner energy, despite its net-zero carbon emissions goal by 2050.

Resources Minister Madeleine King emphasized the need for gas to support renewable energy generation and act as a backup during peak periods. She stated, "As ageing coal generation comes offline in coming years, gas will continue to be needed to firm renewable energy generation and as a backup during peak energy use periods." Stable sources like energy storage or gas-fired plants are essential when weather-dependent sources such as solar and wind are intermittent.

The government's move includes issuing 10 permits for assessing carbon capture and storage (CCS), which Greenpeace Australia criticized as a regression in emission cuts. Environmentalists argue that CCS has not proven effective and will extend fossil fuel usage.

Earlier this month, Australia's competition regulator warned that the east coast could face gas shortages as soon as 2027. Although Australia produces more gas than it needs domestically, most of its supply is earmarked for export.

Exploration permits will be granted to companies like Exxon Mobil's Esso and Beach Energy in the Otway and Sorrell basins on the east coast, and to Chevron, Japan's Inpex Corp, Melbana, and Woodside in the west. Any discovered gas will supply the domestic market.

King clarified that the permits don't automatically allow new production, stressing the need for industry regulator approval on safety and environmental aspects. Additionally, no new seismic surveying will be allowed; instead, companies must utilize existing data.

(With inputs from agencies.)