New analysis from InfluenceMap finds that companies and industry associations from the fossil fuel value chain in Australia have pushed back heavily on any attempt to reference reducing fossil gas demand in Australia’s Future Gas Strategy, all while strongly advocating for new fossil gas supply and investments. Fossil fuel advocacy on this issue is misaligned with science-based policy, based on guidance from the Intergovernmental Panel on Climate Change (IPCC) to achieve global climate goals.
Assessments of the consultation responses reveal an attempt to include fossil fuels within Australia’s Capacity Investment Scheme, a policy that aims to support the country’s renewable capacity by underwriting new renewable generation and storage.
In addition to Australian oil and gas corporate entities, fossil fuel interests in Asia, particularly Japan, actively advocated for Australia to expand fossil gas exports. Australian oil and gas entities shared this position while at the same time emphasizing issues with domestic gas supply, representing a possible contradiction in their advocacy.
The analysis revealed the use of several narratives (see table 1) by entities advocating for a continued role for fossil gas. These narratives were assessed as not aligned with key findings from the IPCC, as well as with a number of authoritative bodies such as the International Energy Agency (IEA), Australian Climate Change Authority (CCA), United Nations Environment Program (UNEP) and Commonwealth Scientific and Industrial Research Organization (CSIRO).
Despite the wider importance of the Future Gas Strategy to Australia’s decarbonization journey and renewable energy ambitions, the research also reveals a notable silence from other sectors of the economy included in InfluenceMap’s LobbyMap database, such as financials, consumer staples, and transportation companies. Supportive advocacy from generally more positive corporate actors in Australia could provide a counterweight to the fossil fuel advocacy that risks dominating the debate.
In October 2023, Australia’s Department of Industry, Science and Resources released the 'Future Gas Strategy' consultation paper, with the goal of developing a plan to guide fossil gas production, consumption, and substitution in Australia to 2035 and 2050. The Strategy notes that “the role of gas will continue to change as the world decarbonizes to address dangerous climate change and meet commitments under the Paris Agreement.” The consultation paper also highlights the need to shift Australia’s energy system toward net-zero emissions and recognizes that reducing gas demand will support decarbonization while easing affordability and energy security concerns. It notes that an adequate, but not excessive, supply of gas needs to be maintained.
The policy has relevance across the economy, as without action to support a measured yet rapid phasing down of fossil gas, it is likely that other sectors of Australia’s economy will be tasked with an increased burden in contributing to the country’s 2030 and 2050 emissions reduction targets. The IPCC is clear that it will be impossible to limit global warming to 1.5°C “Without immediate and deep emissions reductions across all sectors.”
The consultation responses were released in January 2024. InfluenceMap assessed advocacy on the Strategy against the Science-Based Policy recommendations of the IPCC on the global use of gas in 1.5°C decarbonization pathways. A full explanation of InfluenceMap's methodology, alongside a glossary of terms, can be found here. The finalized Future Gas Strategy is expected to be released in mid-2024.
Analysis of the submissions to the consultation reveals disproportionate engagement from the fossil fuel value chain, which is overwhelmingly advocating for a fossil fuel future. A total of 34 companies and industry associations in InfluenceMap’s LobbyMap database, which covers the largest and most influential corporate entities in Australia, submitted a response to the consultation. Of those, 26 (76%) advocated in a manner that is misaligned with IPCC guidance on the global use of gas in 1.5°C pathways. Just three companies and associations (9%) advocated in a manner that is aligned with Science-Based Policy. These findings are displayed in figure 1 below.
Multiple entities from the oil and gas industry used their response to advocate for fossil fuels to be included in the Capacity Investment Scheme, which would give fossil fuel companies access to finance intended for renewables. The Australian Energy Council, the Australian Pipelines and Gas Association, Origin Energy and Woodside Energy each advocated for the Capacity Investment Scheme to expand to include fossil fuels, while the Australian Energy Producers advocated for Australian energy and climate policy to be “technology neutral”, and APA Group called on similar policy to be introduced that incentivizes fossil fuel use. Opening up the Capacity Investment Scheme to fossil fuel projects would allow such projects to be supported through a government policy that aims to “provide(s) a national framework to encourage new investment in renewable capacity, such as wind and solar, as well as clean dispatchable capacity, such as battery storage.”
The oil and gas industry pushed back on the consultation paper’s acknowledgement that a reduction in fossil gas demand would support the decarbonization of the Australian economy and that excess supply should be avoided. Woodside advocated for the Strategy to outline that it is “not going to artificially seek to curtail supply in an attempt to reduce demand”. Chevron similarly recommended against the objective that fossil gas supply should not be in excess, emphasizing potential consequences of high energy prices and energy shortages. INPEX, Senex and the Chamber of Minerals and Energy of Western Australia advocated similar positions, with Senex stating that the government’s approach of ensuring sufficient - but not excessive - supply of gas is “fundamentally flawed”.
Many oil and gas interests advocated for the strategy to promote new supply and investments in fossil gas, stressing that new gas supply is needed to avoid domestic gas shortages, while simultaneously promoting continued or increased fossil gas exports. 22 companies and industry associations advocated for the Future Gas Strategy to prioritize or facilitate new investment and supply in fossil gas, including BP, Origin Energy, Woodside Energy and Chevron. Of these 22 entities, 14 also stressed the need for the strategy to support Australia’s fossil fuel exports, including the Asia Natural Gas and Energy Association (ANGEA), Business Council of Australia, Santos and INPEX. Three entities - the Australian Energy Producers, the Australian Chamber of Commerce and Industry and BlueScope Steel - advocated for the removal of state moratoriums on fossil fuel exploration and production.
The consultation responses reveal a lack of positive engagement from other areas of the economy that claim to support the Paris Agreement and Australia’s net zero by 2050 target. Of the 34 respondents covered by InfluenceMap’s database, 30 (88%) came from the energy, metals and mining, and utilities sectors. In contrast, entities from other sectors of the economy included in InfluenceMap’s database, such as financials, consumer staples and transportation companies, did not appear to transparently engage with the consultation. These findings point to the continuation of a trend identified in InfluenceMap’s January 2024 Australia analysis, which found that a significant majority of Australia’s leading companies and industry associations across a broad array of sectors are failing to follow through on their supportive top-line climate messaging with active advocacy for climate policy.
Only three respondents, Fortescue Future Industries, the Clean Energy Council and the Energy Efficiency Council, appeared to use their submission to advocate for Science-Based Policy. These entities were assessed as aligned with IPCC advice on delivering 1.5°C warming. Fortescue Future Industries called for the Future Gas Strategy to support a decline in gas usage that aligns with Australia's climate targets, while also advocating for policy to aid the development of green hydrogen. The Clean Energy Council called for the Strategy to plan for the systematic phasing out of fossil-fuel gas extraction, consumption and exports and to support the full decarbonization of Australia’s gas sector in alignment with the country's 2030 and 2050 emissions targets. The Energy Efficiency Council likewise advocated for the Australian Government to use the Future Gas Strategy as a vehicle to begin planning Australia's transition away from fossil gas and as a guide to assist emerging nations in transitioning away from a reliance on gas.
While AGL and EnergyAustralia promoted policy measures to reduce Australia’s reliance on fossil gas, these entities also advocated for continued fossil gas investment and supply. For example, AGL supported restrictions banning gas connections to new residential buildings, and supported improved energy efficiency standards for new and existing buildings, yet it also appeared to call for continued gas supply to meet demand. EnergyAustralia also suggested the Strategy provide a clear policy commitment across all levels of government that “electrification is the most effective means to decarbonize energy and adjacent sectors”, but simultaneously advocated for “significant investment” in new fossil gas supply in its submission.
The analysis of the consultation submissions to the Future Gas Strategy revealed a number of industry arguments and narratives that appear misleading or inaccurate when compared to Science-Based Policy recommendations from the IPCC. Five distinct and recurring narratives were found to have been repeatedly used, each of which are summarized in Table 1 below. Further analysis from authoritative bodies including the International Energy Agency (IEA), Australian Climate Change Authority (CCA), United Nations Environment Program (UNEP) and Commonwealth Scientific and Industrial Research Organization (CSIRO) have also been used to assess these narratives.
| Narratives | Alignment | Description |
|---|---|---|
| Continued fossil fuel use is aligned with climate goals. | Misleading or Inaccurate: The IPCC is clear that additional supply beyond existing fossil fuel infrastructure would exceed the remaining carbon budget for 1.5°C. | The IPCC states in its 2022 report that estimates of future CO2 emissions from existing fossil fuel infrastructures already exceed remaining cumulative net CO2 emissions in pathways limiting warming to 1.5°C with no or limited overshoot (high confidence)” (AR6 WG3 Chapter 2).
The IPCC’s 2022 report likewise finds that in modelled pathways that limit warming to 1.5°C , the global use of gas in 2030 and 2050 is projected to decline by around 10% in 2030 and 45% in 2050 compared to 2019 (AR6 WG3 Technical Summary). The Australian Climate Change Authority stated in its 2023 Annual Progress Advice Report that “reducing emissions from electricity generation, which accounts for almost one-third of Australia’s total emissions, is critical in its own right and for facilitating emissions reductions in other sectors of the economy. This is because it opens up options for reducing emissions by switching away from emissions intensive coal, oil and gas and towards the use of clean electricity, such as in electric vehicles and electric hot water, cooking and heating, and in many industrial processes.” The UNEP 2023 Production Gap Report showed 69 coal projects and 49 new oil and gas projects already in the pipeline in Australia that will produce 5 GtCO2eq of potential emissions if all are realized. |
| New Australian fossil fuel supply is required to support the decarbonization of Australia's trading partners. | Misleading or Inaccurate: Analysis from the IPCC and the IEA contends that increased reliance on fossil gas to achieve decarbonization is a limited and potentially dangerous strategy. | The IPCC’s April 2022 Report on Mitigation of Climate Change refutes the idea that gas is conducive to decarbonization, stating that “purely fossil fuel to fossil fuel switching is a limited and potentially dangerous strategy unless it is used very carefully and in a limited way” (AR6 WG3 Chapter 11).
The UNEP 2023 Production Gap Report states that despite many countries promoting gas as a bridge or transition fuel, future investment in gas infrastructure “could hinder or delay the transition to renewable energy systems by locking in fossil-fuel-based systems and institutions”. The Australian government’s energy data shows that liquefied natural gas exports already increased 7% in 2021-22 and have grown by an average of 16% per year in the last decade. The IEA’s 2024 Electricity Report found that emissions from electricity generation in Southeast Asia are expected to grow 4% a year due to a high share of fossil-fired generation. |
| New fossil fuel supply is needed to avoid shortfalls in the future and maintain energy security. | Misleading or Inaccurate: Recent research from the IEA anticipates that global energy demand growth over the next three years will likely be covered by low-emissions energy sources. | The International Energy Agency’s (IEA) November 2023 “Oil and Gas Industry in Net Zero Transitions” report states that no new exploration for O&G in aggregate is needed if countries are to meet climate & energy pledges. White it states some investment will be required in existing supply, it adds that the USD 800 billion the sector currently invests each year is double what is required in 2030 to meet declining demand in a 1.5 °C scenario.
The IEA 2024 Electricity Report found that electricity generation from low-emissions sources – which includes nuclear and renewables such as solar, wind and hydro – is set to cover all global demand growth over the next three years. In Australia, the report found that most capacity additions in the coming years are anticipated to come from renewables. |
| Australian fossil fuel projects are essential to the economy. | Misleading or Inaccurate: Recent industry data finds that the gas industry’s contribution to employment and economic value in Australia is often overstated | The UNEP 2023 Production Gap Report found that many operators of major oil and gas projects pay little or nothing in royalties or resource rent taxes in Australia. Despite being highly profitable, to date, no LNG project has paid Petroleum Resource Rent Tax. It also found that multiple government subsidies continue to support the fossil fuel industry, including the Fuel Tax Credit Scheme.
The Australia Institute’s Climate of the Nation 2023 Report finds Australians overestimate the contributions of the gas industry to the Australian economy, both in terms of employment and economic value. Oil and gas employment was found to make up only 0.2% of the Australian workforce, while the gas industry was found to account for 2.5% of Australia’s GDP. In addition, 2021-22 Australian Industry data from the Australian Bureau of Statistics shows that the oil and gas industry is one of the least jobs intensive industries in Australia, providing 0.2 jobs per million dollars of output. In contrast, education and training provides over eight jobs per million dollars of output. |
| New fossil fuel supply is essential for consumer affordability. | Misleading or Inaccurate: Analysis from CSIRO and the IEA finds that increased investment in renewables is more likely to reduce energy prices than new gas-fired generation. | CSIRO’s 2023-24 GenCost draft report (released in December 2023) finds that variable renewables (including wind and solar photovoltaic) provide the lowest cost range of any new-build technology.
The IEA 2024 Electricity Report stated that the reduction of wholesale electricity prices was largely due to record levels of renewable energy generation and low levels of gas-fired generation. In fact, the report states that gas-fired generation is often the most costly. |
