The Australian competition watchdog has warned that the southern Australian states face a looming gas shortage unless they develop new gas fields, pipelines or import terminals to increase supply.
The Australian Competition and Consumer Commission (ACCC) Gas Inquiry report increases political pressure on the Andrews Government, which has banned all onshore gas exploration and development.
The report has called on state governments to co-ordinate this new gas infrastructure investment and to be more involved in the management of tenements to ensure increased gas supply is available to customers and puts downward pressure on prices.
The Andrews Government has adopted a binary approach to energy policy, setting aggressive targets for renewable development and exploring moving outside National Electricity Market rules to proceed with new transmission lines, while banning onshore gas development and demonising remaining coal fired generation.
The ACCC report suggests the Victorian Government is on a collision course with Federal Energy Minister Angus Taylor, who has insisted more new gas is needed in Victoria to bring price relief to gas customers and prevent accelerated closure of gas dependent manufacturing operations.
East coast gas supply increased marginally since 2019 with an additional 33PJ made available to domestic customers, abating fears of a gas shortfall in 2020, although the ACCC has warned the outlook beyond 2021 remains “uncertain”.
Gas prices offered by producers have remained steady at between $9 to $10 per GJ across eastern Australia, but remain above easing netback prices (down to around $7.50/GJ) as global prices soften.