By Raquel Mustillo
MEMBER for MacKillop Nick McBride has defended taxpayers footing a multimillion dollar State and Federal Government bill to facilitate gas extraction in the Limestone Coast, saying governments should provide funding to the high-risk sector to drive down energy costs.
But Limestone Coast Protection Alliance chair Angus Ralton said the impending suspension of Beach Energy’s Katnook Gas Plant due to dwindling gas reserves should prompt a rethink into fossil fuel subsidies.
The Liberal MP said although Beach’s announcement was disappointing, he was hopeful more seismic testing at the nearby Dombey-1 well would result in the reinvigoration of the refinery.
“It is really disappointing that the initial outcome and the investment laid out, which the company thought there would be an excess amount of gas available at a discount compared to the SEA Gas Line, has not come to fruition, but I don’t think anyone at all is thinking it is a disaster at this stage,” he said.
“There’s still a lot of science to be discovered and Beach is hopeful the investments that have been made by the company and the government will pay dividends to the community and industries.
“Beach are still hopeful they will be able to restart the Katnook plant and also find the reserves they initially thought were down there.
“The government is very supportive of maximising gas for the strong businesses that are in the region, including Kimberly-Clark, and making sure they have access to the most affordable gas possible.”
Beach’s operations in the Limestone Coast have been supported by grants from both the South Australian Government’s now defunct Plan for Accelerating Exploration gas grant scheme and the Federal Government’s Gas Acceleration Program.
Under the State Government scheme, Beach received $6m for its Haselgrove-3 exploration well and $5.2m for the Dombey-1 well.
In a statement released in December 2017, Beach said the Dombey-1 well will aim to bring new gas to the market within three years. Beach Energy received a $6m grant from the Federal Government to co-fund the construction of the $22m facility, which has an operational capacity of 10 terajoules per day.
Mr Ralton issued a “please explain” to successive State Governments and the current Coalition Government following the surprise suspension of Katnook Gas Plant operations.
“The State Government – which was Labor at the time the grants were given to Beach – and the Federal Government, including Tony Pasin and Scott Morrison, need to come clean to the members of Barker and Australia as a whole about why we had to spent $20m of public funds to prop up an industry that is clearly failing,” he said.
“That is millions of dollars that could have gone to investing in renewable energy sources that have long-term futures rather than fossil fuels which are finite.
“Our thoughts are with Kimberly-Clark and its workers who were told they would get cheaper electricity because of these developments.
“Cheap power will only come from renewables, it is the cheapest form of power generation in Australia today and the Australian Government needs to have a frank and proper discussion about embracing renewables and ditching fossil fuels for good.”
Member for Barker Tony Pasin said the Federal Government’s $6m contribution was allocated following a competitive application process as part of the Gas Acceleration Program to assist with Australia’s “gas-led recovery”.
“As Beach Energy have indicated the single well at Haselgrove-3 will be temporarily shut down while Beach seeks to bring alternative conventional gas resources back to the Katnook Gas Processing Facility in the near future,” he said.
“Whilst it is disappointing that the single well at Haselgrove-3 has performed below expectations, the Otway Basin is an important resource and the Federal Government remains confident that conventional gas extraction within the Basin will form an important part of our nation’s energy strategy.”
