A warning by the energy market regulator that Australia faces gas shortfalls this winter and a supply shortage from 2027 highlights the need for more gas development in areas such as Gippsland, according to a key industry body.
The Australian Energy Market Regulator said in a report last week that extreme weather this winter may lead to gas shortfalls, especially if coal and renewable alternatives to meet demand were unavailable.
“Long-term gas shortfalls are forecast across the country from 2027 without more investment in supply,” AEMO said.
The federal government’s intervention to impose a price cap had fuelled investment uncertainty.
“Ageing gas supply in the south was declining faster than predicted demand,” AEMO said.
Risks in the southern states depended on how quickly pipelines from Queensland could deliver gas to the south, with the export of gas another danger.
The Australian Petroleum Production and Exploration Association (APPEA) said AEMO’s report was further reason for all governments to explain how they plan to bring on new gas supply.
“AEMO makes it clear that the root cause of the gas market shortfalls is inadequate supply and infrastructure,” said APPEA chief executive, Samantha McCulloch. “Ongoing market intervention and price regulation, permitting delays, and state-based barriers to new gas development are exacerbating the risk of shortfalls.”
Ms McCulloch said last month that Victoria faces serious energy consequences. Total gas production was set to decline by 43 per cent within three years, risking the state’s energy security and putting upward pressure on gas prices.
Australian and state government research showed substantial natural gas reserves exist both onshore and offshore in Bass Strait, she said.
Victoria’s Lead Scientist, Dr Amanda Caples, said Victoria’s 2020 gas report showed that development of Gippsland’s onshore conventional gas would boost the region’s economy and create jobs.
