It is not for decision makers within a project or development approvals process to give weight to commercial viability.
Sure, if economic, social or environmental harm could flow from project failure, that’s another question. But that’s a much different thing than having a view about the viability of a gas project or a gas pipeline, and the impact on the investors’ financial return. It’s akin to refusing a fish and chips shop application because the regulator doesn’t believe the town has enough fish and chip consumers.
Having lost their campaign to block the Narrabri gas project, its opponents have now moved on to the question of economic viability and the likely impact on gas prices. Their argument is that the gas will be costly to extract, and the cost will be passed on to consumers. That must be why the big industrial consumers have been urging the project’s approval!
The argument against the Hunter Gas Pipeline on economic grounds is even weaker. Activists say it will become a “stranded asset”. I don’t know how they could possibly know this. One thing is certain, those investing their money in the project obviously have a different view. No doubt strengthening their confidence is the possibility the pipeline will one day be a carrier of hydrogen, too.
The two projects will bring more gas and create a more competitive gas pipeline network. The law of supply and demand dictate that more supply will lower prices for electricity generators, households and industry. Of course, this will not be true if there is a monopoly of supply but that is not, and will not, be the case. There will be more competition on the supply side, not less.
The Narrabri project will create 1,100 jobs in the construction phase and around 200 jobs on an ongoing basis. Along with an expanded gas pipeline network, it will underpin the viability of new gas-fired electricity generators and in doing so, provide the stability that the electricity grid needs to allow the entry of more renewable energy. Importantly, the two projects will also create more jobs in our manufacturing sector by providing much needed feedstock and cheaper energy.
The project has secured a tick from each of the State’s regulators, and Commonwealth approval is likely given the scientific conclusions reached in NSW.
The Narrabri gas project will create jobs, save jobs, lower carbon emissions and help to ensure the Hunter remains the powerhouse of NSW. It’ time to get on with it.