The Institute for Energy Economics and Financial Analysis has on Tuesday released a report showing demand for gas will dwindle from both Australians and the nation’s top export customers.
Gas cannot compete on price compared to renewables, the institute says.
IEEFA analyst Bruce Robertson says net zero emissions policies are leading to cheap renewable energy.
“Similar to the terminal decline of coal globally, we are now seeing the rapid decline of gas as a major source of fuel in the international and domestic energy system, being replaced by renewable energy and newer more sustainable technologies,” he said.
“The very rationale for embarking on a gas-fired recovery plan post COVID-19 has been removed.
“This failure to acknowledge the current global energy transition away from fossil fuels and into sustainable, clean renewable energies is leading Australia’s economic recovery policy to a dead end.”
The Morrison government has announced five gas fields it wants to open up to support exports and manufacturing.
One of those is the Northern Territory’s Beetaloo Basin, with $50 million in grants on offer for companies who want to drill into it.
Robertson said the price of gas in the NT could not compete with cheaper renewables.
“Grid scale batteries are now cost competitive with gas, eating into gas’ market share for peaking power,” he said.
“In supporting a gas-fired recovery, Australia is subsidising a losing industry that is experiencing export and domestic market declines.”
The federal government last year approved a controversial gas field in NSW’s Narrabri, paving the way for the $3.6 billion coal seam project to go ahead.
The project was then added to a list of 15 projects set for fast-tracked approvals because of the coronavirus pandemic.
But it has been taken to court by the Environmental Defenders Office, who on Monday were granted the right to file expert evidence from a climate scientist as part of its case against the project.