A stark new report has sounded the alarm on a looming gas crisis in New South Wales, warning it poses a direct threat to jobs, small businesses, and the future of vital industries across the Hunter Region.
Report Warns of Economic Threat from Declining Supply
The study, titled "Running on Empty 2.0 - The Evolving Role of Gas in NSW" and released by Business NSW, outlines the growing economic risk from declining domestic gas supply. It argues that gas is not merely a transitional fuel but remains essential for the state's industrial and manufacturing strength.
Daniel Hunter, CEO of Business NSW, emphasised the pervasive role of gas in everyday life and industry. "From medical devices and clothing to milk and bread, these essentials depend on gas for production," he said. "On a larger scale, we see it in fertiliser, alumina refining, and food processing. Without urgent action, we face higher costs, lost jobs, and a weaker industrial base."
Controversial Projects and Alternative Pathways
The report maintains support for the contentious Narrabri gas project as central to the state's supply strategy but acknowledges its future is uncertain due to significant delays. It also continues to back liquefied natural gas (LNG) import terminals as part of an "all options" approach.
However, the proposed Hunter Gas Pipeline, intended to run from Narrabri to Newcastle, faces fierce opposition from more than 100 farmers fighting to prevent the pipeline from crossing their land.
Peter Wills, a member of the Hunter Gas Landholder Rights Alliance, criticised reliance on Narrabri. "Narrabri offers too little too late," he said, advocating instead for LNG import terminals like the one at Port Kembla, which he stated is ready to bring in substantial supply. He also accused gas giant Santos of creating the shortage by prioritising exports, noting that 80% of Australia's gas production is shipped overseas.
Gas as a Critical Bridge in the Energy Transition
Bob Hawes, chief executive of Business Hunter, stressed that gas plays an indispensable role in supporting the clean energy transition. "Without it, we just can't get there," he stated. He explained that gas provides crucial "firming power" for renewables, quickly ramping up to fill gaps when solar and wind output drops and ensuring grid stability.
Beyond energy, gas is a vital feedstock for producing ammonia, which is used in explosives for mining and construction, agricultural fertiliser, and carbon dioxide for food processing and medical applications.
Highlighting innovation in the region, Mr Hawes pointed to the Hunter Valley Hydrogen Hub, led by the state's largest industrial gas user, Orica. This project, backed by a $432 million ARENA grant, aims to replace natural gas with renewable hydrogen to produce sustainable ammonia. If successful, it would deliver an emissions benefit equal to removing 26,000 cars from the road annually.
The Business NSW report identifies renewable biomethane as one of the most immediate and commercially viable pathways for gas-reliant businesses to decarbonise without disruption. It also suggests that establishing an east coast gas reservation could help stabilise prices and improve supply certainty for local users.
