How can News Corp call its Gas Splash an “exclusive” and “special report” when it is paid for by the industry? | Adam Morton

TThe big news on Monday morning was that the story plastered on the front page of News Corp’s top-selling tabloids was no news at all. It was an advertorial funded by a fossil fuel industry. Not that readers who glance at page one of the Daily Telegraph, the Herald Sun, the Courier-Mail or the Adelaide Advertiser have been let in on this secret.

Instead, they were sold a lie – that the story was pure reporting, in some cases described as an “exclusive” or “special report”, about how (in the words of the Courier-Mail) Australia was “on its feet “We have to step on the gas” as this is the “only way to avoid higher bills and power outages”.

Only readers who glanced at an identical spread about the importance of gas in the News Corp stable were informed of the truth – that it was an infomercial “proudly sponsored” by gas infrastructure company APA Group and the Gas companies companies Tamboran, Santos and Jemena. Those who read the main article online saw no disclosure at all.

The main message on the double page spread was: “Now only gas can save us”. It warned that “households will be plunged into darkness – while paying even more for electricity – without action on Australia’s gas shortage”.

The second paragraph was particularly unsubtle, saying industry leaders were “eager to tackle the looming deficit, but to have any hope of success they say politicians and regulators must end long delays in project approvals.” In other words: Please let us produce more gas.

The argument was supported by quotes from the bosses of Woodside, Santos, APA and the oil and gas lobby group Australian Energy Producers, known until a marketing shift as the Australian Petroleum Production and Exploration Association.

Climate Change and Energy Minister Chris Bowen was asked for his views – a spokesman responded on his behalf saying an additional 600 petajoules of gas had been secured for the east coast – but no other views were otherwise sought.

There were side stories about how high electricity prices affect food producing companies and an opinion piece from former Foreign Secretary Alexander Downer – not, as I said, a well-known energy expert. Neither acknowledged what analysts had repeatedly said: that the significant rise in energy prices in recent years was largely due to the Russian invasion of Ukraine, which drove up fossil fuel prices, rather than solar and Wind energy.

There is no gas shortage in Australia

Let’s look at the claims in the main body.

Much of this depends on a July report from the Australian Competition and Consumer Commission that found Australia’s east coast will face potential gas shortages by 2027 and in some states by 2026 unless new sources of supply are in place. The ACCC said southern states relied heavily on gas from Queensland producers during the winter months when consumption of the fossil fuel peaked. This was partly due to the gas fields in Bass Strait being nearly exhausted.

This is a real problem. Australian businesses and households use gas and there will be significant problems and hardship if there is not enough gas available while they continue to rely on it.

But from there things get more complicated. Not everyone with expertise agrees with the industry’s view that the answer lies solely in more extraction.

Let’s look at some facts not included in News Corp’s promotional brochure sponsored by the gas industry.

Gas is essentially methane – a potent fossil fuel that plays a major role in triggering the climate crisis. More than 20% of Australia’s greenhouse gas emissions come from extraction and combustion. If Australia’s leaders are serious about tackling the climate crisis – as the gas industry and major political parties claim – then logic tells us that gas use must be limited where possible.

For obvious reasons, it cannot simply be cut off before the country is ready. Failure to provide enough gas to meet demand would likely reduce support for the energy transition and lead to a backlash and higher emissions in the long run. But the public deserves honesty about what the goal is and what the options are.

Another fact about gas: We have far more of it than News Corp or the industry admits. There is no gas shortage in Australia. More than 70% of the volume produced is converted into liquefied natural gas (LNG) and exported. If the gas consumption of the export industry in Australia is taken into account, this figure rises to around 80%.

Australian governments have provided gas pools to companies and asked for relatively little in return for the gift of these resources. The companies did what companies do: they sold the product for maximum profit, in this case mainly abroad. This was a problem because, unlike Western Australia, the East Coast does not require a certain percentage of gas to be reserved for domestic use. The result? Local gas prices – once cheap – rose sharply as the international market set the tariff. And there is regular talk of gas shortages.

The Albanian government has taken some steps to address these issues, including introducing a temporary price cap. This led to a double-digit drop in prices, but Australians are still paying at least three times what was considered normal. It is not easy to solve these problems. Contracts are in place. But climate change is a crisis, as the government has said, and how and where Australian gas is used during a crisis is a political decision.

Threat to supply from aging coal-fired power plants

Finally, consider News Corp’s support for the industry’s claims that more gas can help avoid higher bills and power outages.

This is basically nonsense.

In the bills, gas is the most expensive type of electricity on the national grid for the reasons mentioned above. It is used in “peaker generators” that can be turned on and off quickly during times of high demand – such as during a heatwave when people turn on air conditioning. Using more of it would increase bills, not decrease them.

The industry argues that greater supply will help drive down prices. Some experts say this is unlikely to be the case for gas and that any change would be marginal as the international market remains the price setter and Australia’s cheap gas resources are largely already developed. New deposits are harder to reach and often require more expensive extraction and transportation methods.

This is part of the campaign to help households switch to electricity and stop using gas for cooking and heating. This is both good for the climate and, depending on how the upfront costs are addressed, can help reduce costs. Life pressure.

As for power outages, outages at aging coal-fired power plants posed the biggest threat to supplies during last week’s heatwaves. The Australian Energy Market Operator says the best way to address this issue is to quickly install more renewables and batteries.

Aemo says Australia will need more gas-fired capacity as the coal industry winds down and aims to operate on 90% renewable energy, but does not necessarily need to burn more gas in the medium term. Peaking gas-fired power plants will provide a backup or “strategic reserve” that will be called upon when cheaper and cleaner options – solar, wind, hydro, a much larger battery supply and a better transmission grid – are not sufficient to meet the needs ensure supply.

In a News Corp-announced “week-long series explaining the importance of stepping on the gas to avert a crisis,” there’s another gas constituency that hasn’t been mentioned yet: industrial users who rely on high-temperature industrial practices and do not yet have a viable alternative.

But let’s put this into perspective. According to the Grattan Institute, about two-thirds of the gas used in production is consumed in just 15 companies, which together employ about 10,000 people. They use only a fraction of the gas Australia gets from the ground and could be supported while reducing gas use elsewhere.

Apparently none of this will appear in News Corp’s papers while the gas industry buys up the price. Just as obviously, readers deserve some basic facts. We’ll learn a little more about how much respect the company has for the public in the coming days – but I assume we already know.