New offshore gas up in the air as acreage access stalls

Prospects for the release of new areas of offshore gas exploration under federal Labor remain unclear, according to testimony at federal budget hearings.

Coalition resources spokeswoman Susan McDonald quizzed the federal government over ongoing uncertainty for consumers and the industry, with supply still a pressing issue for the domestic gas market and prices rising.

Under the traditional annual rolling process, oil and gas companies nominate areas they would like to access and the federal government releases new offshore petroleum acreage areas that companies can bid to explore. 

"In terms of future acreage releases, they will be considered in the normal way," Assistant Minister for Manufacturing and Trade Tim Ayres told the senate estimates committee.

But bids from the last round, begun under the previous government, are still awaiting a decision that needs federal sign-off, and the timing of the next round has not been decided.

Senator McDonald said the federal government was unable to name a budget program that would increase Australia's gas supply.

"This is more evidence of how hollow this government's words are when it comes to investing in new gas supply," she told AAP. 

She said federal Labor was unable to point to more than a single grant of acreage that could supply the east coast, and refused to provide a timeline for any further acreage releases.

"It is clear this government's future strategy for gas is just a plan to close down the industry," Senator McDonald said.

Senator Ayres said the federal government supported gas projects that "stack up in terms of their regulatory compliance" but it was up to private companies, not taxpayers, to develop the resources.

There was no change in the federal stance on the controversial development of the Beetaloo Basin in the Northern Territory, which critics say is a potential "carbon bomb".

"It is absolutely a matter for the territory," Senator Ayres said.

Onshore fracking in the basin could be underway as early as next year after the territory government lifted a moratorium on the industry.

About 500km southeast of Darwin, the Beetaloo Basin contains an estimated 500 trillion cubic feet of gas, making it one of Australia's most energy resource-rich areas.

Meanwhile, Resources Minister Madeleine King is going ahead with an offshore carbon capture and storage acreage release.

Offshore producers may opt to use depleted wells to meet federal carbon emission reduction requirements and corporate commitments to net-zero operations.

But Greens Senator Peter Whish-Wilson questioned whether any offshore carbon capture storage projects were meeting their targets or were commercially viable, in Australia or elsewhere.

He also remains concerned ConocoPhillips Australia is planning exploration in the Bass Strait in a permit area off King Island to identify commercially viable gas reserves.

A recent senate inquiry into seismic testing recommended new technologies be developed to reduce potential harm to the marine environment.

Officials were unable to confirm whether that would be required by the regulator.

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