Gas producers guarantee more supply at crisis meeting

gas

The Australian gas industry has agreed to work with government to ensure more gas is made available to the domestic market, after a crisis meeting with the Prime Minister yesterday.

Malcolm Turnbull announced a series of measure that had been agreed on at the meeting, which was attended by the heads of Santos, Shell, ExxonMobil and other industry representatives.

“It is vital that Australians have access to reliable, secure and affordable gas, whether it’s for the generation of energy, electricity, or whether it’s for industry, families and households,” Mr Turnbull said.

“We are a massive gas exporter. It is utterly untenable, unacceptable, for us to be in a position where domestic gas consumers – whether it’s generators, whether it’s businesses and industry, or whether it’s families – cannot have access to affordable gas.”

The PM said gas producers have given a guarantee that gas will be available to meet peak demand periods in the national electricity market.

“They’re going to revise their domestic gas production forecasts,” he said.

“That will enable the energy market operator to provide a revised supply outlook.

“There won’t be a repeat of a situation where a gas-peaking power plant is called on by the regulator to produce electricity during a heatwave, and there’s no gas available.

“That won’t happen again, consistent with the guarantees we’ve been given.”

The meeting was scheduled after the Australian Energy Market Operator released the 2017 Gas Statement of Opportunities report last week, which revealed a projected decline in gas production could result in a shortfall of gas-powered electricity generation from as early as next year.

“As you know, last week the operator provided a projection which showed a shortage of gas supply in the eastern market with deep implications for energy security,” Mr Turnbull said.

“Two of the east coast LNG exporters AGLNG and QGCLNG have given a commitment to being net domestic gas contributors.

“That’s to say they’ll be putting more gas into the domestic market than they’re taking out of it.”

Mr Turnbull said it was agreed that pressure must be put on state governments to revisit restrictions on gas development and exploration.

“Only last week, the Victorian Government passed through their parliament a law which effectively bans not just unconventional gas development in Victoria onshore, but conventional onshore gas development, so without any fracking,” he said.

Another meeting has been scheduled next month.

The meeting came just a day after the South Australian Government released its $550 million energy plan, which includes the construction of a new gas-fired plant, as well as Australia’s largest battery facility.

Mr Turnbull said the plan is an “expensive game of catch-up” for the government’s failures.

APPEA Chief Executive Dr Malcolm Roberts said the meeting had been constructive.

“APPEA welcomes the Prime Minister’s initiative to work with the industry to remove the barriers to more gas supply,” Dr Roberts said.

“The gas industry will always work to ensure there is sufficient gas to meet Australia’s domestic needs.”