Faced with looming shortfalls, Victoria opens the way for new gas
The government has identified the transition from gas as a key priority. It is stated that home and small business gas consumption will decrease by 13.5 percent between 2022 and 2023 and by 4.5 percent in 2024.
However, a recent report into community consultations on gas exploration licences justified the new projects by arguing that “the transition away from fossil gas requires a coordinated approach to ensure an orderly transition”.
The government has identified the transition from gas as a priority.
Australian Energy Market Operator (AEMO) warned The upcoming domestic gas deficit, The Albanian government is expected to make an announcement within a few days on a national reserve that will secure supplies from exports.
Such a move would be backed by the Victorian government, which in September called on the Commonwealth to intervene, claiming it had run out of supplies after decades of supplying gas to the state’s east coast.
However, the risk of ongoing deficits and the fact that gas will be used more frequently to generate electricity to supplement shortfalls in renewable sources has led governments to take other measures to prevent price increases.
Victoria’s exploration licenses are the latest example of the state adjusting its discourse on gas to acknowledge these issues.
Grattan Institute energy and climate change director Alison Reeve said although Victoria had a roadmap to transition from gas, the transition was not happening quickly enough compared to the decline of existing gas fields.
“You don’t know how quickly demand will drop, especially since the rate of decline is in some ways in the government’s hands,” he said.
Australian Energy Producers, which lobbies gas and oil companies, welcomed the decision to release exploration permits, saying it was the first permit since 2018.
Victorian governor Peter Kos said shortages could emerge from 2027 and the permits were an important first step in unlocking new domestic supplies.
“Natural gas from Bass Strait has been reliably powering Victorian homes and industry since the 1960s, but these legacy fields are now in decline. New discoveries are crucial to replace this resource and ensure the state’s energy security,” he said.
Kos said the government should commit to regularly publishing exploration permits to encourage confidence in investment.
Ursula Alquier was the Victorian coordinator of the Lock the Door Alliance, which ran a successful campaign against fracking and unconventional gas drilling a decade ago.
He said there were only “tight” and unconventional gas reserves in the Seaspray region, and these could only be accessed through fracking.
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“The coal seam gas that is available in that area of Gippsland can only be accessed by fracturing the coal seam. There is no social license for that to happen in any of those areas.”
The offshore Otway Basin reserve is adjacent to the ecologically sensitive Bay of Islands Coastal Park and covers 54 square kilometers between Warrnambool and Port Campbell.
Stanley Woodhouse, offshore fossil gas campaigner for Friends of the Earth, said community reaction to the government’s consultation on exploration permits had been “swift and devastating”.
“The Victorians have made it clear that they do not want new gas exploration and drilling in our fragile ecosystems,” he said.
“Regardless, the Allan government is putting permits out to tender. Once again, Labor has ignored the community and caved to industry pressure, using the lie of the East Coast gas crisis to force communities into agreeing to unwanted, unnecessary fossil fuel projects.”
Opposition energy spokesman David Davis said further gas discoveries were welcome but the Victorian government had failed to secure supply during Labor’s decade in power.
“After 11 years in government, it is no surprise that we have gas shortages,” he said.
Australian Conservation Foundation methane and fossil fuel campaigner Freja Leonard said both communities directly affected by potential gas exploration sites had made it clear they did not want new gas projects in their areas.
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