Two of Australia’s biggest liquefied gas shippers say decisions taken more than 10 years ago to green-light multibillion-dollar resource export projects helped propel the federal budget back into the black last week, but a slew of market interventions now threatens new investments that could drive future economic prosperity.

Shipments of liquefied natural gas (LNG) from Australia are forecast to rake in export earnings of $91 billion in 2022-23 – three times more than in 2020-21 – on the back of record-high prices as countries around the world scrambled to secure alternative supplies to Russian gas due its invasion of Ukraine.

However, producers of the fossil fuel have been under mounting political pressure from a series of government reforms designed to restrain energy bills, raise more funds for cost-of-living relief, and curb planet-heating greenhouse gas emissions to help arrest climate change.

Meg O’Neill, chief executive of top Australian gas producer Woodside Energy, on Tuesday said last week’s $4 billion budget surplus – the country’s first since the 2008 global financial crisis – was underpinned by investment decisions made “10, 15, 20 years ago” on projects that had developed commodities including iron ore, LNG and coal into today’s powerful economic contributors.

The budget papers pointed to “strong commodity exports” as one of the drivers of a bigger-than-forecast 3.25 per cent expansion of the economy by July.

Loading

O’Neill cautioned that a more “challenging” investment climate today could cloud Australia’s economic outlook for the 2030s. The industry argues that a string of government interventions this year – including unprecedented $12-a-gigajoule caps placed on domestic gas prices – has made it more difficult for companies’ boards to sign off on local investment decisions both for fossil fuel and renewable energy projects.

“If we want budget surpluses in the 2030s, if we want reliable and affordable electricity for the consumer here in the 2030s, those are decisions that are going to be made in the near term and the settings are getting more challenging,” O’Neill told the Australian Petroleum Production and Exploration Association (APPEA) conference in Adelaide.

Tony Nunan, the outgoing Australian boss of British-headquartered energy major Shell, said this year’s interventions would make it harder for future Australian projects to compete for capital from companies with a vast global footprint. While stressing Shell would remain committed to Australia, he said the combined impact of this year’s interventions could alter the “risk-reward” balance for future investment decisions.