Woodside says gas intervention threatens power supply, investments
Australia’s biggest gas producer Woodside on December 13 said that the federal government’s plan to cap gas prices will not meet the objective of bringing down the cost of living pressures for households and could make matters worse.
“Woodside fully supports policies that aim to bring down cost of living pressures for Australian households. The federal government’s broader plan to intervene in the Australian gas market will not meet this objective and could make matters worse,” it said.
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The Australian government December 9 said gas prices will be capped at A$12/gigajoule (GJ) for 12 months, with the government to contribute to costs.
“A policy of such significance, proposed without any meaningful consultation with industry, creates an environment of uncertainty that will result in investment activity dropping across energy markets. This will make solving the underlying structural problems in the energy market harder, not easier,” the company added.
Woodside has called on the federal government to reconsider this “unprecedented intervention” and bring energy companies, retailers, manufacturers, and infrastructure owners together to properly engage on a solution.
“The prime minister last Friday correctly acknowledged that Australia has not invested enough in its own energy security. And yet the unprecedented market intervention announced risks driving investment out of the system,” Woodside CEO Meg O’Neill said. “That investment, including in natural gas, is crucial to support renewable energy sources as we strive to decarbonise without the lights going out.”
O’Neill said that Woodside has been looking at options to increase supply, including through new LNG import terminals, exploration spending and further development on the east coast.
“Unfortunately, the proposed market intervention will make it very difficult for the industry to economically invest to increase supply,” she said.
Australian prime minister Anthony Albanese told ABC Radio on December 12 that he will be meeting the oil and gas industry this week to discuss the government’s plan to cap gas prices.