Future Gas Strategy: consultation paper

Submission to the Future Gas Strategy consultation paper

BlueScope welcomes the opportunity to comment on the Future Gas Strategy consultation paper.

BlueScope is Australia’s largest steel manufacturer and the only flat steel producer. We employ around 7,000 Australians at more than 100 sites across the country, supplying customers in the building and construction, manufacturing, transport, and agriculture sectors. BlueScope also exports steel products and is a global leader in premium coated and painted steel products, manufacturing in
16 countries. Globally, BlueScope employs around 16,500 people in New Zealand, the Pacific
Islands, Asia and the USA.

As a significant user of gas at its various manufacturing facilities in NSW and Victoria, BlueScope has a direct interest in the future of Australia’s gas market.

Our current Australian domestic consumption of network gas is around 4PJ. In addition, BlueScope also uses 28PJ of indigenous gas produced as a by-product of the steel blast furnace and coke ovens at the Port Kembla facility. Gas is also used at midstream sites in New South Wales and Victoria such as paint lines and coating lines where it is used to fire furnaces and ovens and support high heat processes above 800 degrees Celsius. Technology to electrify these processes is nascent and not currently viable. Biomethane could potentially fill this demand if sufficient volumes were commercially available. However, BlueScope will continue to be a significant gas user into the future and has signed a supply agreement with Senex for the supply of 2PJ per annum from 2026 1.

Decarbonising BlueScope’s operations meaningfully and achieving its net zero by 2050 goal depends on using gas until hydrogen is cost competitive. This builds on BlueScope’s interim targets of a 12% reduction in emission intensity in steelmaking and 30% in non-steelmaking by 2030.

Using Direct Reduced Iron (DRI) technology, BlueScope’s anticipated transition pathway to low emissions steel is to use gas in the DRI process until hydrogen is cost competitive. Initially this would reduce BlueScope’s steel making emissions by more than 60% from current levels. When hydrogen is available, emissions would be reduced by approximately 85%, meaning that the heavy lifting on emissions reductions will be driven by access to cost effective gas.

This long-term strategy would allow Australia to maintain sovereign iron and steelmaking capability.

But to achieve this, BlueScope will need to access up to 40PJ of gas per annum at commercially competitive prices – or about 7 per cent of current gas demand in eastern Australia. The step change in gas sourcing is driven by the loss of indigenous gas production from the cessation of blast furnace and coke ovens production and the transition to DRI technology.

While the Australian Energy Market Operator is forecasting a decline in gas demand over the next 20 years, most of this is through demand destruction. In contrast, BlueScope’s current and future need for gas underlines the resource’s importance to assist Australia in decarbonising.

Additionally, BlueScope will require 3.6TWh per annum of firm, cost competitive renewable electricity – the equivalent of a quarter of the state of South Australia’s annual electricity demand.

In response to the consultation paper, BlueScope would like to particularly emphasise the following:

1. Gas is critical as Australia seeks to decarbonise. The availability of affordable gas is central to
BlueScope’s long term decarbonisation strategy, until such time as green hydrogen becomes
commercially viable. In this way, gas is a key enabler of the ‘bridge’ to net zero. Without it,
BlueScope’s plans to deliver major reductions in greenhouse emissions while retaining and
enhancing Australia’s sovereign steel production will be undermined. In this context it is notable

1
Subject to Senex securing exempon from Federal Government gas price cap.
that several overseas jurisdictions with ambitious climate change targets see a key role for gas to
provide energy security and support decarbonisation. For example, in the EU a 27-year LNG supply
contract with Qatar has been entered into by Shell, to supply the Netherlands.

2. Demand for gas as a ‘transitional fuel’ is understated. Demand for gas from several industries
is likely to increase in the medium-term to help them meet climate change goals, before tailing off
in the longer term. This includes industries such as iron and steelmaking that will be seeking to
move away from coal as a key input, but for whom green hydrogen is not likely to be viable until
well into the 2030s or 2040s. The potential role for low-emissions gaseous fuels (e.g. biomethane)
is also important in this transition.

3. Assumptions of a linear fall in gas demand are not likely to be correct. Rather, demand is
likely to vary considerably by industry and occur in a series of step-changes as large, ‘lumpy’ capital
investments occur when alternative technologies and inputs become viable.

4. Future pricing expectations are not globally competitive. The consultation paper assumes that
prices of ~$12/GJ remain globally relevant and appropriate. However, such prices will not support
the critical role of natural gas in helping to decarbonise iron and steelmaking in Australia. Other
gas rich nations, such as in the Middle East and United States, are already attracting investment in
direct reduced ironmaking based on their materially lower gas prices. In Europe, substantial
government subsidies, and protections, such as the recently commenced carbon border adjustment
mechanism, are attracting investment in low emissions ironmaking. If low emissions ironmaking
becomes concentrated in these regions, the risk is that such investment will be lost to Australia
without affordable gas supplies and supportive policies. Once lost, such investment is very unlikely
to return.

5. New gas developments are required in Australia. Bass Strait gas production is declining, and
the need for replacement gas is paramount. Victoria and New South Wales need to expedite gas
developments by removing legislative bans (Victoria) and providing expedited approval processes
(New South Wales).

The A$12/GJ price anchor operates as a floor-price for gas in the eastern Australian gas market.
This is well above internationally competitive prices other steel producers face. Alternatives
like LNG will be even more expensive [imports not likely to be competitive]. Together these highlight
the need for more gas being made available to domestic Australian gas users.

Harmonisation of Federal and State environmental approvals is required to expedite new gas
developments.

6. A proportion of new gas supply should be reserved for domestic use ahead of export. To
lower prices for domestic customers, a proportion of new gas developments should be reserved
for domestic use. Domestic reservation has been successful in supporting investment in
processing and manufacturing in Western Australia (WA Domgas policy), and more recently in
Queensland (Qld tenement reservation). Governments should also consider cost-effective
alternatives to building new transmission infrastructure, such as developing more liquid and
transparent trading hubs and facilitating gas swaps.

7. Electrification offers an opportunity to reduce some industrial gas usage and free up gas
suppliers for other users. Currently, LNG producers in addition to being major exporters are
the largest gas users in Australia, consuming approximately 100PJ per annum in their own
operations. The use of gas in LNG processing could be reduced through greater use of
renewable energy in the liquefaction process. This would free up existing gas for
decarbonisation projects like that proposed by BlueScope, and in industries where electrification
of high temperature manufacturing processes is not feasible. A coordinated approach to LNG
industry electrification therefore offers an opportunity to efficiently unlock the gas needed for
industrial decarbonisation without increasing the overall carbon budget. This will help achieve
Paris Agreement targets.

BlueScope submission – Future Gas Strategy 2
8. Gas demand for peaking will grow. While aggregate gas consumption for electricity generation
is likely to decrease over time, it is important to acknowledge that gas demand for peaking plants
to help firm renewable electricity will grow as the penetration of renewables in the electricity system
grows. Firming will be critical to underpin the affordable, reliable electricity supply that BlueScope
will need for 24/7 manufacturing processes such as iron and steelmaking.

BlueScope has been working with industry associations, most notably Manufacturing Australia, and partners for more than a decade to seek policies that delivered competitively priced natural gas for domestic value-adding manufacturing uses. This work began when it became clear that the establishment of the East Coast export LNG industry was fundamentally changing the dynamics of the domestic gas market, away from the interests of domestic consumers and towards those of gas exporters. Unfortunately, despite our efforts, policies under several governments have failed to deliver adequate supplies of gas at affordable prices for domestic users and have left entrenched serious flaws in the domestic gas market. The Federal Government’s Future of Gas Strategy is an opportunity to address these issues and rebalance the domestic gas market so that it helps deliver sufficient gas at internationally competitive prices to help underpin the decarbonisation of important sovereign manufacturing industries.

Appendix 1 provides responses to specific questions raised in the consultation paper.

If you require clarification about any of the matters outlined in this submission, we would be happy to discuss them further with you.

Yours sincerely

BlueScope

BlueScope submission – Future Gas Strategy 3
About BlueScope

BlueScope manufactures iron and steel products in Australia using the blast furnace – basic oxygen furnace (BF-BOF) process at the Port Kembla Steelworks (PKSW) in NSW. This process takes raw materials including iron ore, metallurgical coal and limestone and smelts them to produce raw iron.
Further processing then takes place to add scrap and other elements to make steel. Approximately three million tonnes of steel products are manufactured at PKSW each year, with up to about one-third exported.

This iron and steelmaking process is carbon intensive. In fact, carbon is integral to the chemical reaction to extract iron from iron ore and steel is an alloy of iron and carbon. To significantly reduce greenhouse gas (GHG) emissions, a new process that manufactures iron without using coal will need to be commercialised. BlueScope and its industry partners consider the most prospective process for low-emissions ironmaking to be direct reduced iron (DRI). Production of DRI is a solid-state process in which natural gas or hydrogen is used to remove oxygen from iron ore. Even after the DRI process is adopted, a residual source of carbon would still be required for its alloying properties, to make steel.

BlueScope has two interim GHG reduction targets by 2030: a 12 per cent reduction in emissions intensity from its iron and steelmaking sites; and a 30 per cent reduction in emissions intensity from non-steelmaking sites. It also has a goal of net zero GHG emissions by 2050.

Efficiency and renewable gases

BlueScope is taking steps to use natural gas more efficiently. These steps include replacing older generation oven technology at its Western Port plant in Victoria, which will reduce natural gas consumption at the site by approximately 330TJ per annum, thereby reducing GHG emissions by approximately 18,000 tonnes (CO2-e) per annum.

BlueScope is a signatory to the Renewable Gas Challenge, which aims to support the development of renewable gases such as biomethane by, among other things, biomethane certification so that hard-to- abate sectors of the economy have line of sight into cost-competitive and meaningful emissions reduction opportunities.

BlueScope is also engaged in several commercial discussions on the development of biomethane projects across the East Coast gas market. Although conversations are in early stages and it will be some time before biomethane projects are cost competitive with natural gas, the Company sees a real need for industry leadership in this sector and will continue to support commercial-scale projects coming to the market.

Low emissions iron and steelmaking study

BlueScope is currently undertaking a scoping study to examine options for low-emissions iron and steelmaking in Australia. It has two main objectives:
1. Identify iron and steelmaking options that provide a step change in carbon emissions reduction
and set the pathway to net zero by 2050.
2. Identify and quantify the enablers required for each option and any additional government
measures required to support this on an economic basis.

The study, which is expected to be completed in 2024, is examining several potential locations for low- emissions ironmaking using a DRI process, at Port Kembla and in South Australia and Western
Australia. This includes examining options to manufacture DRI using both hematite and magnetite ores.
The study assumes that steelmaking will remain in Port Kembla, with its well-established infrastructure, workforce, and proximity to key markets.

Although the study has not been completed, its preliminary findings are that, under all options examined, meeting climate change targets will require use of natural gas to manufacture DRI, until green hydrogen becomes viable in the late 2030s or 2040s. DRI processes can be configured to use natural gas and transitioned (at relatively low cost) to hydrogen once it is price competitive. It could require up to 40PJ

BlueScope submission – Future Gas Strategy 4
of natural gas per annum, which is equivalent to about 7 per cent of current gas demand in Eastern
Australia. Use of natural gas to manufacture DRI would cut emissions by approximately 60 per cent compared to the current BF-BOF process at PKSW using coal. This would reduce BlueScope’s Scope
1 GHG emissions by approximately 3.7 million tonnes per annum.

As well as being important to achieving Australia’s emissions targets, investing in low-emissions technology will help maintain sovereign iron and steelmaking in Australia. Steel products are essential inputs for a wide range of domestic industries, including building & construction, manufacturing, renewable energy, and defence. In this way, the production of low-emissions steel will form a critical component in the nation’s broader clean energy transition. It will also help build local capabilities and expertise in decarbonisation, and the development of critical intellectual property in Australia for the processing of iron ores.

BlueScope submission – Future Gas Strategy 5
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Appendix 1 – Reponses to Consultation Paper questions

Question BlueScope Response
1. Do you use any international and/or domestic forecasts BlueScope references the AEMO GSOO and several other subscribed publications from
to inform your outlook of the gas market? We want your specialist consultants including Wood Mackenzie and EnergyQuest to better understand
views on which scenarios best reflect the demand outlook. international and domestic markets.
Are there any limitations or additional factors impacting
the demand outlook you would like to note? At a domestic level, the demand outlook is uncertain beyond two or three years out.

Large users will base their forecasts on overall production plans and so industrial gas use is a
reflection not only of the pace of gas alternatives but of their underlying view of their own
industries.

Additionally, large users will not include confidential or sensitive information in this publication.
Over reliance on GSOO or demand forecasts may not be the most reliable predictor of future
demand.

We urge caution when using gas demand projections based on 1.5-degree warming
scenarios. These projections are based on what is needed to limit global temperature rises
and may be overly optimistic regarding the roll out of renewable power, electricity transmission
infrastructure, electrification of industry, green hydrogen production, and carbon capture and
storage or direct air carbon capture. If this is the case, gas demand projections are likely to be
significantly underestimated in these scenarios and lead to narrow views such as the IEA
concluding in its Net Zero Roadmap: A Global Pathway to Keep the 1.5⁰C Goal in Reach
(2023) 2 that there is no need for investment in new natural gas. Also, gas should not be
aggregated with coal and other fossil fuels in such forecasts, given its potential role in
assisting industries such as iron and steel to achieve significant GHG abatement.

2. What role do you see gas-fired generators playing in Gas fired generators will be an essential part of the energy transition. Gas provides deep
supporting Australia’s 82% renewable energy targets and firming to support a more resilient grid when renewables are not available and long duration
beyond? storage options such as pumped hydro or batteries have been exhausted or are not available.

BlueScope requires 24/7 power supply and gas firming will feature in its energy mix going
forward.

2
htps://www.iea.org/reports/net-zero-roadmap-a-global-pathway-to-keep-the-15-0c-goal-in-reach

BlueScope submission – Future Gas Strategy 6
3. How will the expected trends in demand from gas-fired The Princeton Net Zero study considers new gas-fired generation required in all modelled
generators impact other gas users? scenarios to firm up renewables beyond other options such as pumped hydro and batteries.
Gas will invariably become peakier as renewables penetration increases and is likely to result
in seasonably variable demand. Variable and seasonal demand disrupts traditional gas supply
commercials and favours intermittent supply options such as LNG import terminals. This will
impact other gas users because gas will cost more as the marginal molecule of peaky gas
supply sets the underlying cost base for flat, stable gas users. The problem is particularly
acute when investment signals are dampened through State and Federal policies.

4. What should government do to consider managing Implement a national domestic market obligation where gas export projects must supply a
these impacts and to mitigate energy peaks caused by proportion of gas production to Australia’s manufacturing sector, especially where gas
regional or seasonal variations? contributes to a manufacturing facility’s emission abatement. Prices for gas supplied under the
domestic market obligation could be set by international benchmarks, such as Henry Hub, to
ensure the international competitiveness of Australian manufacturing.

Gas also has a key role to play in firming variable renewable energy through its use in peaking
electricity generation.

5. How feasible, and at what scale, are alternatives to The use of biomethane for peaking is inefficient.
natural gas for the electricity sector? You may wish to
consider renewable gas alternatives for peaking Its high cost will result in high electricity prices, similarly with hydrogen. Gas peaking
generation, for example, biomethane and low-emissions generation should be complemented by other grid-firming technologies of sufficient depth and
hydrogen and other forms of grid-firming technologies like duration.
batteries and pumped hydroelectricity. What barriers exist
to using these alternatives? Cost pressures through the supply chain and inflation have impacted the timely delivery of
battery projects, and significant planning impediments prevent pumped hydro from being
available in time and at the right volume to make a meaningful contribution as an alternative to
support a 2030 target.

6. How much longer will you continue using gas as a fuel BlueScope will constantly use gas. Its consumption will materially increase as technology
source or feedstock for your business? Do you think your moves us away from using coal and the indigenous gases produced from current blast furnace
consumption of gas will decline over time, and if yes, at operations.
what rate?

BlueScope submission – Future Gas Strategy 7
7.Are there alternatives that your business can use Hydrogen is an option, and it will materially reduce the amount of natural gas required, but it is
instead of gas (for example electrification, hydrogen, not commercially available at the right price or volume.
biomethane or circular economy inputs)? What barriers
exist to using these alternatives? How can the substitution Under a green ironmaking scenario with hydrogen DRI processes it is possible that natural
of gas be accelerated? gas would not be required if biomethane was available at volumes of up to 8PJ p.a. for our
needs.

Other options such as methane pyrolysis are not at the required technology readiness level
(TRL) to proceed with a business opportunity. Hydrogen DRI at Port Kembla Steelworks is not
yet possible as transmission infrastructure will not support 1.5GW of firmed hydrogen, which
will also require 4-4.5GW of renewables for hydrogen generation.
8. What factor/s influence your willingness to adopt High heat processes are unsuited to electrification. Substitution of gas for other processes is
electric appliances or processes? How could governments negligible for our business and is not being pursued as it diverts much needed resources from
support small businesses to decrease gas consumption? larger projects.

9. What role might carbon capture, utilisation and storage CCS is logistically and commercially difficult given our location as identified in Figure 12 of the
(CCUS) and negative emissions technologies (NETs) (for Consultation Paper. It is not currently an option for BF-BOF operations. Under NG-DRI
example direct air capture and CO2 removal) play in process we may be able to incorporate CCS depending on the location of the DRI plant. This
decarbonising industrial processes that are hard to abate is still under investigation.
in your business or industry?
Other negative emissions technologies remain highly prospective and cost prohibitive at this
time.

10. If your home or small business gas appliances (stove, No comment.
heating, or hot water system) stop working, would you
prefer to keep using gas or switch to an electric
appliance?

If you are unsure, what would help you decide? What
factors influence your willingness to switch to electric
appliances?

11. How can governments, industry and households work No comment.
together to manage impacts for homes?

12. What do you see as the role of gas in Australia’s net- See comments on pages 1-3 above.
zero transformation?

BlueScope submission – Future Gas Strategy 8
13. What action is your industry or company taking to See ‘Efficiency and renewable gases’ and ‘Low emissions iron and steelmaking study’ on
reduce greenhouse gas emissions and does gas use pages 4-5 above.
have a role to play?

14. How can Australian LNG accelerate global Use of Australian LNG to supply industries that are decarbonising by substituting natural gas
decarbonisation without compromising energy security or to replace coal is likely to accelerate global decarbonisation, and support affordability and
affordability? supports energy security.

15. What measures will increase the transparency of LNG No comment.
supply chains, including their environmental, social and
governance impacts?

16. Does current gas transport and storage infrastructure No comment.
support the changing role of gas in the residential and
commercial sector? If inadequate, what is needed and
who should provide the change?

17. What role will LNG – and Australian LNG in particular No comment.
– play in your economy’s energy transition?

18. What is your economy’s current LNG demand and No comment.
how do you predict this will change through to 2035 and
beyond to 2050?

19. What options should the Australian Government No comment.
consider to ensure international investment in Australian
LNG projects remains competitive?

20. What value do you place on low or net zero emissions No comment.
LNG production?

21. What is the role of offshore acreage releases in the A proportion of new gas supply from offshore acreage releases should be reserved for
context of consumer demand and emissions targets? domestic use. Domestic reservation has been successful in supporting investment in
What factors should the Australian Government consider processing and manufacturing in Western Australia (WA Domgas policy), and more recently in
when releasing acreage? Queensland (Qld tenement reservation).

BlueScope submission – Future Gas Strategy 9
22. How could the offshore petroleum regime be improved No comment.
to meet the objectives of the strategy?

23. What are the major barriers and opportunities for new Inconsistent approaches by State governments (e.g. Victoria and NSW) when it comes to new
supply? How can the Australian Government prioritise, gas developments. The lack of new gas developments in eastern Australia will lead to
mitigate or manage these? significant increases in gas prices, in turn placing at risk future decarbonisation projects like
BlueScope’s.

24. What are some of the opportunities for gas production There are three major opportunities for new Australian gas production to 2035 and 2050:
in Australia in the medium (to 2035) and long term (to 1. Beetaloo basin in the Northern Territory
2050)? How could these necessary developments support 2. Browse in Western Australia
decarbonisation consistent with achieving emissions 3. Release existing gas supply used for LNG plant own-use to limit need for more gas
reductions goals? projects. This would support decarbonisation by repurposing gas to demand shift so
that gas is used in the right part of the hierarchy.

A priority should be placed on getting the additional gas into the eastern Australian market with
preference give to industrial customers switching from coal to gas as this aids
decarbonisation.

25. How can the Australian Government better Governments should be actively and comprehensively working with project proponents to
communicate and provide more transparency to local engage with local communities.
communities regarding gas projects?

26. What opportunities exist to improve engagement and Better engagement and consultation by all governments would be beneficial. The Energy and
consultation processes with industry? Climate Change Ministerial Council is the best forum for this.

27. How can all levels of governments better support the All level of governments should be working closely with First Nations people when projects are
industry to engage with First Nations people and proposed. This engagement should be on-going during project development.
community groups?

28. How can Australia support the potential for cost- Funding and cost support to connect east coast emitters in locations not suited to CCS or, if
effective, safe and verifiable CCS projects, including for this isn't economic, other support to help transition businesses to other technologies faster.
the gas sector, other industries and our region?
Planning support and approval to ensure assets are harnessed to CCS and low carbon
outcomes.

BlueScope submission – Future Gas Strategy 10
Ultimately, recognise the potential and actively promote this with more agnostic policy settings.
Hydrogen Headstart provides support for the H2 industry, and this is some way off. CCS may
be a more appropriate option sooner with comparable opportunities.

Understand the role of CCS globally and the lessons learned around funding, support, social
licence etc.
29. How can the Australian Government better No comment.
communicate and provide more transparency to local
communities regarding CCS projects?

30. How fit for purpose is Australia’s gas transmission and Transmission and distribution networks are currently fit for purpose, though they are not
distribution network? adequate for a hydrogen blended future.

The cost of augmentation will be capital inefficient for both transmission and distribution as the
Victorian residential demand ban drives electrification. It will mean that those left will pay more
and for less benefit.

The focus should be on how the pipelines remain fit for purpose by using NG with either
biomethane through the pipeline or the use of complementary technologies such as CCS to
abate carbon.

31. What changes should be made to the transmission No comment.
and distribution network to prepare for the changing
profile of gas demand in Australia? What risks and
opportunities would this entail?

32. Could the construction of LNG import terminals Construction of LNG terminals could improve energy security in Australia. However, the cost
contribute to improving energy security in Australia? of delivered gas would be significant.

BlueScope would be challenged to undertake its decarbonisation projects if it had to depend
on imported LNG given the large volume of gas required. LNG import terminals will drive a
permanent structural shift from export parity pricing to import parity pricing – resulting in the
loss of one of Australia’s fundamental competitive advantages.

33. Under what conditions would LNG import terminals be It is unclear whether they would be commercially viable for BlueScope.
commercially viable in Australia?

BlueScope submission – Future Gas Strategy 11
34. Are you able to attract and retain the workforce and Our preference is to convert the coal-based blast furnace to natural gas based direct reduced
skills you need? How will these shift as we transition to iron at our existing Port Kembla Steelworks in NSW where we have an existing and highly
net zero emissions? skilled workforce. The main challenge with Port Kembla is gas availability and price. If
sufficient volumes of gas at an internationally competitive price are not available on the east
coast the DRI plant may need to be constructed in another location such as Western Australia
where the availability of skills and workforce are less clear.

In the absence of being able to domestically secure cost competitive natural gas to support
the transition to low emission iron and steelmaking, the longer-term viability of ironmaking in
Australia will be challenged.
35. What are your long-term business and investment No comment.
plans beyond 2035? How might these affect local
economies, employment and communities?

36. Describe the projects or best practice examples of No comment.
industry engagement with the local community, as well as
the benefits these projects bring to the people and
regional economy.

37. How has the oil and gas industry impacted the local No comment.
economy and employment opportunities in your region?

38. What actions will assist workforce retention, upskilling Sufficient volumes of natural gas (40PJ/annum) at internationally competitive prices are the
and mobility in your community as the economy key requirement to secure long-term lower-emissions ironmaking in our existing community.
transitions to net zero emissions? There are several actions the government can take to assist with this including:
• Implementing a national domestic gas reservation policy.
• Policy and regulatory consistency at the Federal, State and local levels including
removal of inconsistent approaches in relation to new gas developments and
harmonisation of environmental approvals processes.
• Provide incentives for existing gas users to shift to electrification where viable as this
will free up gas availability for other users.
39. What are the risks to Australia’s domestic gas security The biggest risk confronting BlueScope in the medium and long term is the availability of
in the medium (to 2035) to long term (to 2050) for your internationally competitive gas supplies. Without it, BlueScope’s decarbonisation ambitions
industry and how can these be addressed? would become much more challenging.

All governments – Federal, State and Local – need to work together to avoid policy and
regulatory inconsistency. This will impede the development of new gas supplies that are
critical to BlueScope’s and Australia’s decarbonisation focus.

BlueScope submission – Future Gas Strategy 12
40. What do you see as the biggest risk to the ongoing Without more gas being made available either through new developments or freeing up of
affordability of Australia’s domestic gas supply? For existing gas usage through greater focus on electrification at LNG facilities, gas will become
example, what are risks to affordability in the wholesale or more expensive.
retail market?
This poses the greatest challenge to BlueScope’s goal of decarbonising its operations.

41. What reforms can be made at a Commonwealth, Removal of inconsistent approaches in relation to new gas developments. For example,
state, territory, or industry level to allow gas supply to be Victoria and NSW are effectively locking up their gas deposits.
more responsive to domestic demand signals?
Likewise, greater harmonisation of environmental approval processes at the Federal and State
levels should lead to speedier approvals without diminishing environmental outcomes.

A proportion of new gas supply should be reserved for domestic use. Domestic reservation
has been successful in supporting investment in processing and manufacturing in Western
Australia (WA Domgas policy), and more recently in Queensland (Qld tenement reservation).

42. What actions are available to lower gas costs, Provide incentives for users to move away where commercially viable alternatives exist. For
including substitution and new supply, to provide certainty instance, LNG producers are the single largest users of gas. This consumption could be
to consumers? How would these actions further the significantly reduced if they electrified their liquefaction processes.
Australian Government’s decarbonisation goals?
This would free up gas for processes where electrification is not an option – e.g. BlueScope’s
potential DRI investment.

In turn, this would help in Australia’s decarbonisation efforts.

43. What opportunities exist in your industry to As noted, there are significant opportunities to decarbonise subject to the availability of
decarbonise supply chains? internationally price competitive gas supplies.

44. Do you use any forecasts of gas supply to inform your No comment.
outlook of the gas market? If so, what are they?

You may also wish to consider whether these forecast
scenarios consider the technical and commercial
uncertainties associated with gas reserves and resources.
Which scenarios do you consider best reflect the supply
outlook?

BlueScope submission – Future Gas Strategy 13
45. Are there any limitations or caveats associated with No comment.
these scenarios? How do you address these limitations?

BlueScope submission – Future Gas Strategy 14