As the political tug of war on energy continues, in recent times the debate has shifted its focus away from whether or not renewables are causing blackouts – with the “looming gas shortage” now the headline du jour.
The Australian Energy Market Operator – AEMO – released their Gas Statement of Opportunities flagging “a projected decline in gas production could result in a shortfall of gas-powered electricity generation impacting New South Wales, Victoria and South Australia from the summer of 2018-19”
Access to affordable gas is essential for the continued competitiveness of the Australian farm sector. Our fertiliser inputs – and the businesses downstream of us in our supply chain such as food processors – all rely on gas and are facing escalating prices as they seek to lock in new contracts.
Access to gas is critical for the continued competitiveness of these businesses. Gas will continue to be an important part of our energy mix as we transition to a low emissions future. In the short to medium term, gas will play an important role in stabilising the grid from the intermittency of renewables like wind and solar.
The heads of the major gas companies have been hauled into the Prime Minister’s office and been directed to come up with a plan to ensure that we don’t run out of gas – either in the short term or over the long run.
Both the AEMO and gas companies are lining up to say opening up more gas fields now will relieve the short term crisis. There is no doubt that opening up supply will be important to the long term availability of gas to underpin electricity generation and to provide an affordable fuel for manufacturing and household use. In the short term however, the demand pull to meet export contracts will continue to be the primary driver of shortages and rising costs in the domestic market.
It is heartening to see that the Government and the gas industry have taken a constructive approach to discussing options to address the short term issues, to find ways to incentivise energy suppliers to behave in a way that can underpin the availability of gas to relieve the “crisis” in the short term.
But Governments should not bend to pressure and provide carte blanche access to Australia’s precious gas resources, with growing calls to lift state-based moratoria that restrict gas field exploration and development.Jack Knowles, Manager, Natural Resources Policy, NFF
Moratoria have been put in place by State Governments in response to community concerns. They lack confidence in the way that governments have regulated the gas industry in the past.
Here at the NFF, our job is to represent and advocate for farmers. For farmers, this has always been much more than getting a fairer share of the royalties. When it comes to gas development, the two things we can’t and won’t compromise on is the secure access to land and the protection of our precious water resources.
And this means that good, science-based regulation is required. Regulators need:
The Commonwealth Government’s Independent Expert Scientific Committee process and the Bioregional Assessments Program have been good starting points – but more needs to be done. Both these initiatives have a narrow focus on coal and coal seam gas, and their focus has been in just a few regions. We need to broaden their remit to include all onshore gas. We need to translate the outcomes of these past investments to become the useful and transparent quality scientific information that is required to underpin the future regulation of the gas industry.
There is a real role for the Commonwealth to invest in the quality science that’s needed to underpin the robust state-based regulation of gas exploration and development. That science will be the key to solving looming supply constraints.
Jack Knowles is Manager of Natural Resources Policy with the National Farmers' Federation
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