While social licence for fossil fuels has slipped, gas seems to be clinging on longer than the rest.
You’ve probably heard things like “gas is a transition fuel”, “gas is a big employer” and “gas companies pay a lot of tax”.
Even the Government is spreading these gas-friendly sentiments. Australia’s Minister for Climate Change and Energy, Chris Bowen, has defended the “important role” of gas in the energy industry, including touting that in 2030, fossil gas will make up 18% of Australia’s energy mix. The Government has also committed $1.5 billion for the Middle Arm “sustainable development” precinct in the NT (and internal documents have shown that the cost could blow out to $3.5 billion), which will provide major export opportunities for fracked gas from the Beetaloo Basin, and produce emissions equivalent to 12 new coal-fired power stations.
In this critical decade when fossil fuel use should be plummeting, Australian governments are investing in expanding the gas industry and telling us it’s both good for the climate and the economy.
To help you combat some of the misleading rhetoric about the importance of gas that you might come up against this holiday season, the Australia Institute has debunked some of the loudest myths about gas.
Gas is not a transition fuel
To be clear, gas is a fossil fuel. Burning it creates carbon dioxide. Extracting it also results in CO2 and methane being released from the ground.
Gas is often touted as a “transition fuel” – a title that has gained traction because gas produces fewer emissions than coal, and because it ‘displaces’ coal in the energy mix.
While this may have been an argument 30 years ago, global warming is already at 1.1˚C, and we no longer have the luxury of making a leisurely transition, via fossil gas, to renewable energy.
There is no room in the global carbon budget to approve new gas mines that won’t even start producing gas until a number of years after their approval.
Limiting global warming to 1.5˚C requires rapid decarbonisation, and the prevention of all new fossil fuel projects – including gas – in favour of truly zero-emissions energy.
Gas doesn’t create jobs
While much of the rhetoric around the necessity of the gas industry hinges on its importance for employment, in reality, gas doesn’t create very many jobs.
The Australia Institute’s Climate of the Nation report shows that Australians think the oil and gas industry employs 10.4% of the Australian workforce. Actually, gas and oil extraction employs around 21,200 workers – just 0.15% of the 14 million people employed in Australia. Many of these jobs are for the construction of new projects, and do not create secure, ongoing employment opportunities for Australians. For context the manufacturing industry employs 870,700 people and the health sector employs 2.1 million.
Gas doesn’t bring in much money
Climate of the Nation national polling shows Australians think the oil and gas industry contributes 12% to Australia’s GDP, when the real number is actually 2.5%.
Unfortunately, the fossil fuel industry’s political influence in Australia is far greater than its economic significance both federally and at state and territory level. Even in the major fossil fuel producing states like WA and the NT, only about 5% of revenue comes from gas. Virtually no royalties are paid on Australia’s offshore gas projects.
Similarly, at the Commonwealth level, total revenue was $520 billion in 2020-21, of which $16 billion, or 3%, came from Petroleum Resource Rent Tax and company tax paid by the fossil fuel industry.
Five of the gas industry’s most prominent companies have paid no income tax for at least the past seven years, despite a combined income from their Australian operations of $138 billion – much of the profit from which goes offshore to foreign-owned companies.
It’s clear that the rhetoric around gas in Australia is grounded in the interests of fossil fuels, not decarbonisation.
To truly prioritise rapid emissions reduction in line with calls by the IEA, the United Nations, the UNFCCC and scientists in Australia and around the world, there is no room for gas in the transition to zero-emissions renewable energy.
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