THE Australian Energy Market Operator's powers will be extended to direct companies to provide gas for the east coast domestic market next winter, a meeting of energy ministers in Canberra has agreed.
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State and territory energy ministers met in Canberra yesterday with federal Climate Change and Energy Minister Chris Bowen as part of the national cabinet process that replaced Council of Australian Governments (COAG) meetings as part of the 2020 COVID response.
Speaking after the meeting, Mr Bowen announced that emissions reduction would become one one of the stated objectives of the National Electricity Market.
"This might not sound much but this is the first change to the national energy objectives in 15 years," Mr Bowen said.
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In his comments, NSW Energy Minister Matt Kean said Australian gas needed to be prioritised for the domestic market.
An official communique of the meeting emphasised the potential for political intervention in gas and electricity markets.
"Ministers intend to to take a more active role in delivering the firming capacity needed as the system transforms and consider the best means to manage the risks of a disorderly exit of coal generation," the communique said.
Yesterday's meeting follows the news that Santos is buying the Hunter Gas Pipeline project from Weston Aluminium founder and 49-per-cent shareholder Garbis Simonian and his partners including Hunter businessman Hilton Grugeon.
Santos has approval to extract gas from coal seams under the Pilliga forest near Narrabri but needs a pipeline to connect its planned network of up to 850 wells to major gas markets.
Santos had previously rejected offers to buy the Hunter line and was favouring a Western Slopes Pipeline project proposed by major pipeline owner APA.
But the 460-kilometre line is still in the early stages of the approvals process, and APA is yet to lodge an Environmental Impact Statement.
The Hunter pipeline, in contrast, holds the requisite state approvals, although it still has some federal biodiversity hoops to jump, and must negotiate with private landholders along its 820-kilometre route.
Announcing the Hunter pipeline purchase to the stock exchange on Thursday, Santos called it "a second route" for the Narrabri gas, and one that would "remove . . . supply constraints in existing pipelines".
Asked to comment yesterday, APA said only that it was "considering the Santos announcement regarding the Hunter Gas Pipeline".
Environmentalists have opposed the Narrabri project but Santos said yesterday that it does not intend to frack at Narrabri and did not seek approval to do so.
But a spokesperson for Lock The Gate Alliance said the environmental problems associated with coal-seam gas extraction were there whether or not the gas was forced out of the coal seams by pressurised "fracking".
It and other groups say they will continue to oppose the Hunter pipeline.
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Ian Kirkwood
Reporting journalist at the Newcastle Herald since 1987. Editorial writer, general reporter, industrial relations, industry and coal.
Reporting journalist at the Newcastle Herald since 1987. Editorial writer, general reporter, industrial relations, industry and coal.
