South Australia will not provide gas to New South Wales in a supply crunch, the state’s energy minister has warned in an extraordinary speech to industry.
The mining and energy minister, Tom Koutsantonis, made the comments on Thursday during a candid address at an oil and gas industry event in Adelaide, where he warned public sentiment was turning against them.
Koutsantonis had been scheduled to give the opening address but was interrupted by Extinction Rebellion protesters who glued themselves to the door at the National Wine Centre and gave their own speeches.
After the 100 or so industry attendees were moved to a different room, Koutsantonis abandoned his prepared speech and spoke off the cuff, saying “make no mistake, [the protesters] are having an impact”.
He warned the combination of rising power prices and public pressure to act on climate change could cause governments to act, possibly “irrationally”, and bring “dramatic” consequences for the oil and gas industry.
“If Australian consumers are faced with a power price increase of 35 to 40%, in one year, governments will act, and they may act irrationally,” he said. “This industry needs to be prepared for what’s coming at you.
“Next year is going to be a torrid year for this industry.”
Koutsantonis also took aim at federal government negotiations over the so-called national trigger to intervene in the market and secure supplies to meet demand in the eastern states. He said South Australia “will not participate” if the gas the state needed was reserved for use elsewhere.
“If we’re going to have a national trigger, it needs to be a national trigger,” he said.
“This government will not participate in allowing governments like NSW to lock up their resources and then demand that our community, that our state, will send our gas away from customers – who got the exploration in, who got the investment in to meet their needs – because they don’t have the courage to do what we did.”
South Australia has been a pioneer in the transition to renewable energy, with its system including gas-fired “peaking” plants and high contributions from renewable energy.
It uses gas sourced from Victoria, Queensland and the Cooper Basin, and 60% goes to electricity generation while the rest is used by households and businesses.
But exceptionally high power prices have occasionally forced the state to burn diesel for power generation.
Craig Wilkins, the CEO of the Conservation Council CEO, was present at the roundtable and said the Extinction Rebellion protesters challenged South Australia’s “dual track” messaging that supports both renewable energy and the fossil fuel industry.
“I’ve got no doubt that the intervention by Extinction Rebellion clearly brought the elephant into the room,” he said. “It forced all of the speakers to then talk about it for the rest of the session.”
The comments come after Extinction Rebellion blockaded the Society of Petroleum Engineers’ Asia Pacific oil and gas conference in Adelaide this week.
The federal resources minister, Madeleine King, opened the conference by restating the Labor government’s continued support for the oil and gas industry.
“There cannot be a clean energy transition without these traditional resource continuing to play a part,” she said. “Fossil fuels will continue to balance our energy mix and ensure flexible and dispatchable energy gas is central to supporting Australia’s electricity grid.”
Koutantonis also addressed that conference earlier this week, beginning his speech with a joke about the protesters.
“To the protesters outside, thank you for the common welcome to the delegates and your endorsement of petrochemicals by gluing yourself to the road – another interesting use of what your industry supplies,” he said.
The burning of fossil fuels including gas is a key driver of global heating. Last year the International Energy Agency said exploitation of new fossil fuel basins had to stop in 2021 to limit heating to 1.5C, a goal set out in the Paris agreement.
