Gas inquiry follows agency funds block

A plan to allow an energy agency to invest in non-renewable technologies has been shot down.
A plan to allow an energy agency to invest in non-renewable technologies has been shot down.

Australia's oil and gas industry faces a parliamentary inquiry after Pauline Hanson backed a Greens motion in the Senate.

Greens co-deputy leader Larissa Waters successfully moved on Wednesday to set up an inquiry, which will hand down an interim report in August, into oil and gas exploration and production in the Northern Territory's Beetaloo basin.

The federal government is spending hundreds of millions of dollars to unlock the basin for gas production by 2025.

The inquiry will examine not only whether the spending is worthwhile, but the social and environmental consequences of oil and gas exploration and production.

The motion came as Senator Hanson effectively handed another win to Labor and the Greens by abstaining on a motion on Tuesday to stop Australia's renewable energy agency investing in non-renewable technologies.

The Morrison government wanted to expand the remit of an agency known as ARENA to allow it to invest in low-emissions projects such as carbon capture and storage, green steel and hydrogen.

But the Greens, Labor and various crossbench senators teamed up to veto the changes.

"As a result, the government cannot use public money to fund coal and gas projects through the renewable energy agency," Greens leader Adam Bandt said.

"It's a really big win for the climate and it's a huge blow to this coal and gas-fired government."

Senator Hanson abstained from the vote, allowing the disallowance motion to pass.

It is understood Senator Hanson did not like the idea that gas companies who paid no tax in Australia but handed dividends to foreign shareholders stood to benefit from the expanded investment remit.

She said in a statement on Wednesday she was opposed to billions of dollars being paid to placate "climate change zealots".

"One Nation is firmly committed against net zero emissions by 2050," she said.

Pro-coal Labor renegade Joel Fitzgibbon railed against the ARENA vote result, describing it as "the victory I did not want".

Meanwhile, Nationals leader Barnaby Joyce said the march towards a target of net zero emissions by 2050 should be seen from a jobs perspective.

"Our nation has got to pay its way," he told reporters.

"We make our money through exports and exports are emission-intensive.

"If you don't like your exports, well just start telling me how low you want to take your standard of living."

Mr Joyce has downplayed the prospects of clinching a quick deal with the Liberals.

"We don't have to worry about conditions, that's a long way off," he said.

Nationals senator Bridget McKenzie has also spoken out ahead of negotiations between the coalition partners.

She warned Australia risked sleepwalking into an international agreement on net zero emissions, which favoured rich industrialised nations with the competitive advantage of established low-emission technologies such as nuclear power.

Prime Minister Scott Morrison told parliament Australia could have a "low emissions future" and still approve resource projects.

Australian Associated Press