A new report is calling on Australia’s governments to take more control of declining gas production and use, to achieve climate targets and protect energy consumers from high prices.
The Grattan Institute report, Out of gas: Managing the decline of gas in Australia, warns Australia has tough decisions to make about gas, and it needs to make them quickly.
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“Australian households and businesses are using less gas every year. But governments have largely ignored this trend, and have failed to plan for the consequences,” lead author and Grattan Institute Energy and Climate Change Program director Alison Reeve says.
The report shows:
- gas is in decline in Australia, with more households now leaving the gas network than there are joining it
- the amount of gas burnt to generate electricity has been shrinking for a decade, and its role backing up renewables is small
- industrial use of gas is declining as manufacturing changes and businesses electrify.
However, if Australia is to reach net zero by 2050, gas use needs to fall faster, the report says. It calls on governments to urgently implement policies to reduce gas use across the economy, so that they can control the rate of decline and prevent higher prices.
The report also urges state governments to set dates for ending gas use for heating and cooking in homes, if they haven’t done so already, and for the federal government to enforce stricter rules to ensure major industries transition away from using gas.
“A declining gas market will need to be managed very differently,” Reeve says.
“As demand declines, demand for the gas pipeline network will evaporate. This creates a risk of sky-rocketing prices for gas users and of stranded assets for gas network owners.
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“Reducing gas use in Australia is a multi-decade project that must start today. Continuing to ignore the problem will result in a chaotic and inequitable process with higher costs for all.”
