26 October 2022
Interview with David Bevan on ABC Adelaide Mornings
Adelaide, South Australia
Topics: Federal Budget, power prices, need to bring on new supply with the right investment policy settings.
David Bevan: Samantha McCulloch has just joined us. She is CEO of APPEA - that's the Australian Petroleum Production & Exploration Association. Samantha McCulloch, this increase in power prices – 56% over two years. Is there anything you say can be done to drive that down?
Samantha McCulloch: Hi David, thanks for having me. The key and enduring solution to bringing down power prices, well it's a complex issue. But from our perspective as gas producers, we see bringing on more supply as being the key solution to reducing costs.
Bevan: So how quickly do you say your members can go out and dig up and pump out more gas and have an effect on power prices?
McCulloch: Just to be clear, gas is only around about 10% of the power mix. But we do play an important role - gas plays a very important role - in the power sector, particularly during those times when there's limited renewables available and as we are moving more away from coal-fired power generation. What we need to see is more gas supply being developed where it's being consumed. So that includes in the southern states…
Bevan: Yeah but how quickly could that happen? We're talking about increasing power prices over the next two years.
McCulloch: Look, this is not going to happen overnight.
Bevan: Peter Malinauskas says he's going to have a hydrogen plant up at Whyalla. They haven't built the thing and who knows what that would do to power prices in South Australia in terms of dragging it down. What about your members - can they do anything?
McCulloch: This is not an overnight solution in terms of bringing on new supply. We can increase production at some facilities, but the industry has already been working at capacity to deliver gas to the market. For many years, we have been calling on governments and calling for more supply and settings to support the investment in more supply. But what we're seeing is moratoriums and bans and regulatory uncertainty is really hampering the investment that's needed.
Bevan: OK, Samantha McCulloch. Thank you very much for your opinion, from the Australian Petroleum Production & Exploration Association.
