Australia’s gas fired recovery but not in the Prime Minister’s election back yard

This gas story is about the former Australian Prime Minister Scott Morrison

and the pitfalls created by a flawed energy policy since John Howard


Scott Morrison defends secret ministry power grab
16 Aug 2022
But Mr Morrison also admitted that he took control of the resources portfolio in 2021 to overrule then-minister Keith Pitt to block a petroleum exploration licence off the NSW Central Coast.
He acknowledged that decision had nothing to do with the pandemic.
“That was a very different issue … it was one I sought to be the decision-maker on that issue because of the importance of that issue,” Mr Morrison said.
“This is a power a minister has that is not overseen by cabinet … the minister makes their own decision, and the prime minister can’t direct the minister.”
“I always respected Keith’s role as the decision-maker, and if I wanted to be the decision-maker, I had to take the steps that I took.”
He said the ministers were running their portfolios without interference, except in the single instance with the petroleum licence.

The East Coast gas crisis

Australia’s east coast gas crisis, caused by an unfortunate, yet predictable, combination of massive LNG exports (red area in this AEMO graph)

and declining gas production in Victoria

needed a solution. It was codenamed “gas fired recovery”.

The geological setting

In the year of the financial crisis

MEC Resources
23 March 2009
Companies Announcements Office
Australian Securities Exchange Limited
10th Floor, 20 Bond Street
Offshore Sydney Basin – Significant Gas Features
• New hydrocarbon indicators revealed
• Evidence of extensive gas generation
• Key consultants appointed and potential joint venture partner discussions
• Advent looking to secure an appropriate drill rig

50ccccc2-a32a-4338-a217-bda5c92dee6c-MMR441622.pdf (PEP: Petroleum Exploration Permit)

Drilling did not find hydrocarbons

6 Aug 2010
MEC Resources Ltd (“MEC”) wishes to provide a further update to clarify drilling preparations for PEP 11 offshore Sydney Basin, New South Wales.
Advent Energy Limited (“Advent”) has advised that its preparations for drilling within PEP11 are still running to the schedule announced to the ASX on 27 July 2010. Ocean Patriot has been contracted by Advent to drill an exploration well in PEP11, and is anticipated to be available to commence drilling in the fourth quarter 2010.
The Ocean Patriot is due to drill two wells in Bass Strait, offshore Victoria for another major operator
commencing in August. The exact timing of that two well program is to be determined and it is currently anticipated that the rig will be on that program until mid October, 2010.

Bounty Oil & Gas
ASX/Media Release
New Seaclem 1 – final report
4 Jan 2011

Final Report
Since the last report on 29th December the well was drilled to final depth of 750 metres BRT in a pre Cainozoic age sequence possibly of Triassic age. The LWD data (logging data obtained while drilling) was reviewed and a full suite of wireline logging was completed. No hydrocarbons were encountered and the well has been completed.

PEP 11 and the role of gas in NSW

Parliamentary briefing paper Jan 2011
In December 2010, the first offshore petroleum exploratory well off the coast of NSW was drilled in Petroleum Exploration Permit 11. This well was located primarily in Commonwealth waters 61km east of Newcastle. However, at this point in time, no gas has been found. Facts and figures on gas exploration, production and consumption in NSW, along with information on Petroleum Exploration Permit 11, provide the context for an overview of Commonwealth and NSW regulation of the offshore upstream petroleum sector.

NSW gas consumption is expected to increase as proposed gas-fired power plants come online. At the end of 2009, NSW has a combined total of 1,361.2 MW of installed capacity running on natural gas (see Table 7). Principal gasfired generation plants totalled 1,295 MW in June 2009. Of 53 proposed new power stations and expansions in NSW, 20 are expected to run on natural gas with a combined total capacity of at least 8,339 MW. A further 3 will be fuelled by coal seam gas.

28 Jan 2020
Companies Announcement Office
ASX Limited
ASX Market Release – PEP 11 Drilling
BPH Energy Limited (ASX:BPH) (BPH) is pleased to announce that investee Advent Energy Ltd has submitted to the National Offshore Petroleum Titles Administrator (NOPTA) and application to enable the drilling of the Baleen drill target in the PEP 11 permit offshore NSW….
Bounty and Asset are now moving to a drill ready status for PEP 11. The current permit expiry date is in March 2021. The application to NOPTA includes the extension of the permit title for up to 2 years to enable the drilling and includes an application for the removal of the requirement for a 500 sq. km 3D seismic program….
The PEP 11 project lies in the offshore Sydney Basin adjacent to the NSW coast, extending from Sydney to Newcastle and situated in Commonwealth waters. The PEP 11 project comprises significant structural targets believed to hold multi Tcf natural gas resources….
Advent with JV partner Bounty Oil completed a 200-line km 2D seismic survey in PEP 11 in the second quarter of 2018 at Baleen as a precursor to drilling of this target approximately 30 km south east of Newcastle.

Morrison’s gas fired recovery

As the population got tired with Covid, some positive message and outlook was needed.

Prime Minister Scott Morrison Visits Tomago Aluminium
15 Sep 2020
In his address, the Prime Minister outlined the federal government’s post-COVID-19 gas-fired recovery plan, which will include a gas power plant at Kurri Kurri if the energy sector fails to replace the capacity lost from the closure of Liddell power station.

Scott Morrison’s national energy address at Tomago on Tuesday: This isn’t ideology, it’s just common sense
15 Sep 2020
For many firms, the most pressing challenge they face is the failure of the east coast gas market to meet competitiveness benchmarks, and that puts Australian jobs at risk.
While spot prices have fallen under COVID, Australian industry is paying well above export parity prices for contracts. The ACCC says the gap is higher than at any time since the competition watchdog started its gas inquiry in 2017.
Chair Rod Sims has identified 18 cargoes of gas sent offshore this year at prices well below those being offered to Australian industrial customers. And despite our resources, AEMO is forecasting potential gas shortages in the east coast market by 2024.

Now that’s not on. This is not acceptable.

Nor is it sustainable when competitive gas should be helping to fire, gas fire our COVID recovery.

Nor is it acceptable that the Tomago alu smelter is forced to turn off lines.

14 Feb 2017
NSW’s privatized giveaway coal plant causes load shedding in extreme weather

Maybe the lights should have been turned off in those offices where wrong energy related decisions were made.

Doorstop – Tomago
4 March 2021
When I reflect on my last few visits here to the Hunter, firstly, the gas-fired recovery and how we need to address the energy needs of this important sector….

The conflict with gas drilling

PM opposes northern beaches gas project, signalling potential political rift
4 March 2021
The offshore Petroleum Exploration Licence 11 (PEP-11), is up for renewal, having expired last month. Held by Advent Energy, the licence would allow the exploration company to conduct drilling and seismic testing covering an area starting 4.5 kilometres offshore and stretching some 4500 square kilometres, ahead of pursuing approval for production.

A gas project seeking permission to drill offshore between Manly and Newcastle has taken another blow after Prime Minister Scott Morrison said he opposed renewal of the exploration licence, signalling a potential rift in the Coalition.
When asked on Thursday if he supported renewing PEP-11, Mr Morrison said “no”, and he “pretty clearly” did not support it.
It is the first time Mr Morrison has commented on the matter and the statement comes ahead of a final ruling by Resources Minister Keith Pitt, who has previously advocated for the expansion of gas production to help deliver a “gas-fired recovery” from the coronavirus economic downturn.
The Nationals MP said on Thursday that a decision on PEP-11 had not yet been made.
A petition opposing the PEP-11 project gained 60,000 signatures and was presented to federal Parliament last year by Warringah MP Zali Steggall, who defeated former prime minister Tony Abbott at the last election after campaigning on environmental issues.

Scott Morrison’s move was overdue at the time as opposition leader Albanese had already committed himself

Doorstop Interview Terrigal
5 Feb 2021
ALBANESE: Well, all I’ve seen is the public comments from Angus Taylor, from, in the past, from Keith Pitt, which have been supportive of PEP 11. And it is a real concern. They have to make a decision between now and next Friday about whether they include or extend the licence. And we’re saying they should make a decision and they should say no.

Scott Morrison’s secret self-appointment

15 April 2021
Scott Morrison assumes powers of Resource Minister
Another news story said the Commonwealth Government has presented evidence to court that the prime minister was sworn in as Minister for Resources by the Governor General on 15 April 2021.

[The Resource Minister] Mr Pitt wanted to move ahead with approvals. Mr Morrison did not.

Kurri Kurri gas peaking plant approved

22 Apr 2021
Kurri Kurri gas plant EIS

Gas industry continues until NOPTA refuses extension of permit term

Meanwhile, MEC Resources carries on

17 May 2021
MEC Resources Limited Announces Sydney Basin Gas Features Confirmed
MEC Resources Limited announced that Advent Energy has further reviewed research reports by the Australian Government Agency Geoscience Australia. The report confirmed natural gas features in the Offshore Sydney Basin and identified a series of large pockmarks. It is significant that the sediment directly above the fault is disturbed and distinctive circular depressions occur in the sea floor. These depressions are likely to be caused by methane gas and fluid from the Permian coal measures escaping along the fault plane. On the mid slope between the Newcastle Canyons are a number of depressions on the seafloor. These are large features and for example, extend 750 m across slope, with side scarps showing slopes over 20º and floors 70 m below the rims. These features resemble those found on sidescan records from the Mississippi Delta known as “collapse depressions” and result from gas and fluid expulsion from subsurface Units (e.g., Prior and Coleman, 1980). It is considered likely that the features found off Newcastle are also depressions formed from gas and/or fluid escape.

1 Nov 2021
BPH Energy
2020-21 Annual Report
BPH investee Advent Energy’s PEP 11 Gas and proposed carbon storage project at Baleen (Seablue1 well) offshore Newcastle NSW has potential national significance. It addresses both forecast gas shortages and the objective of Net Zero Emissions. Advent has committed all gas from the project to Australia domestic supply. Advent is a strong supporter of plans for Net Zero by 2050 and sees the company playing a direct role in achieving that target, especially for New South Wales.
The report addresses the revised drill target on the Baleen prospect initially announced with total depth of 2150 metres on seismic data line B4-18. Advent now intends, subject to approvals and funding, to undertake deeper drilling to also undertake evaluation of the Offshore Sydney Basin for carbon sequestration (storage). This has resulted in a revised specification of a well to target early Permian sandstones for both hydrocarbon and carbon sequestration potential with a revised total depth being set at 3150 metres.
The total P50 Prospective Resource calculated for the PEP11 prospect inventory is 5.9 Tcf with a net 5 Tcf to Advent (85%WI). The two largest prospects in the inventory are Fish and Baleen.

5 Nov 2021

27 Nov 2021
Advent holds the only exploration title to drill and explore for gas in the seabed off the NSW coast, in an area that stretches from Sydney’s North Head to Newcastle. The company is pushing ahead with plans to drill a well 26 km off the NSW coast, tendering for equipment and services, and a project manager.

PM tells NSW to sink Sydney offshore gas drilling project PEP-11
16 Feb 2022
PEP-11 covers 4500 square kilometres and starts 4.5 kilometres off the coast from Sydney’s famous beaches.

30 March 2022 ASX Announcement
PEP 11 – Update
Bounty Oil & Gas NL (Bounty) (ASX: BUY) and BPH Energy Limited (ASX: BPH) as the PEP 11 Joint Venture announce that they have today been given notice by the National Offshore Petroleum Titles Administrator (NOPTA) that NOPTA has refused the Joint Venture Application initially made on 24 December 2019 for a secondary work program variation and a 24-month suspension of the Permit Year 4 Work Program Commitment and the corresponding 24-month extension of the Permit Term.


31 March 2022


MEC Resources Limited (“MEC” or the “Company”) (ASX:MMR) highlights the following information provided by its investee company, Advent Energy Ltd (“Advent”). BPH Energy Limited (ASX: BPH) and Bounty Oil & Gas NL (Bounty) (ASX: BUY) as the PEP 11 Joint Venture announce that they have today been given notice by the National Offshore Petroleum Titles Administrator (NOPTA) that NOPTA has refused the Joint Venture Application initially submitted on 24 December 2019 for a secondary work program variation and a 24-month suspension of the Permit Year 4 Work Program Commitment and the corresponding 24-month extension of the Permit Term. The Joint Venture has statutory legal rights to seek a review of the decision referred to in the notice under the Offshore Petroleum and Greenhouse Gas Storage Act 2006 and is obtaining legal advice on such review process. David Breeze (Managing Director) authorised the release of this announcement to the market.

Howard gets free ride

Howard: “I am not going to pontificate”

To top up an eventful day ABC star journo Sarah Ferguson had an interview with former PM John Howard

16 Aug 2022

Not a single question was on gas. From Howard’s fundamentally flawed 2004 energy white paper:

We see here a conveniently framed sequence of arguments which have lead to imprudent if not disastrous decisions.

So Howard is the father of the east coast gas crisis, along with his successor Kevin Rudd and his Resource Minister Martin Ferguson who copied on the east coast what Howard started on the west coast, without a gas reservation policy in place which Howard should have negotiated with all States BEFORE initiating and proudly approving the North West Shelf’s LNG exports to China in 2002

We’ll be an energy superpower: PM
18 July 2006
JOHN HOWARD wants Australia to become an “energy superpower”, carving out a position as one of the world’s biggest exporters of coal, natural gas, uranium and petroleum.

In the process, the objective to export as much LNG as possible, has resulted in the East Coast becoming domestic gas poor, the root cause for one of Howard’s scholars, the very Scott Morrison, falling into the traps of this flawed energy export policy. Why should an energy super power have to drill for gas in a contentious offshore area where voters who have invested in precious coastal properties fear for their beaches?

It’s all part of peak conventional gas in Victoria. More unexpected events are to come. Oh this horrible P word.