The Australian Competition and Consumer Commission has once again warned that Australia’s gas outlook from 2022 onwards will remain increasingly tight unless steps are taken to bolster domestic supply.
“There is a gas shortage forecast for Australia’s southern states from as soon as this year, which is likely to continue next year and beyond,” ACCC Chair Rod Sims said. “Southern states will be reliant on gas from Queensland until additional supply from new sources comes on.”
The ACCC explained the gas shortfall has been spurred on by several key factors.
For one, low gas prices have made some reserves uneconomical to utilise when factoring in the cost of the gas extraction process.
Another factor includes the ongoing battle to keep gas within Australia, with corporations opting to export gas in order to generate a larger profit from higher gas prices overseas.
Recently, Australia’s relatively low gas prices situation has been a vastly different story to countries like the United Kingdom (UK) and those within Europe.
“Additional supply from a southern LNG import terminal from 2023, or more domestic supply from the north, may not be enough to address the projected shortfalls, and it may still be necessary to divert excess gas into the domestic market that would otherwise be exported if new supply can’t be developed rapidly enough,' Sims said.
Gas No Longer Necessary, Climate Groups Say
However, the climate change communications organisation, the Climate Council, believes gas should be scrapped altogether.“The increase in solar, wind and batteries in our electricity system is making power bills cheaper for Australian households and businesses,” said Climate Council Researcher Tim Baxter.
“Electricity is now the cheapest it has been in almost a decade and we have solar and wind to thank for that.”
Baxter, along with Climate Council member and former BP Australasia President Greg Bourne, criticised the federal government’s decision to spend $600 million on a gas-fired power station in New South Wales.
The government had commissioned the gas plant to make up for a shortfall in capacity after the announced closure of the ageing Liddell coal-fired power station in 2023.
Unaddressed Concerns of the Renewable Rollout
However, the rapid transition away from coal and gas has brought about concerns of slave labour in the supply chains of carbon dioxide-free alternatives.China—the world’s largest producer of solar panels—has also enslaved millions of ethnic Uyghur, Kyrgyz, and Kazakh citizens who have been found to be involved in the solar supply chain.
Kelly raised further concerns that the purchase of solar and wind components entailed a transfer of wealth worth billions of dollars directly from Australia to the CCP.
Kelly suggested that the cost of solar—which is estimated to be the cheapest form of energy in Australia—is able to do so in part due to the exploitation of cheap labour.
“The Chinese are very clever: move the production out to use the cheap labour of the Uyghurs to keep the solar panels at a price that will dominate the market and will wipe out all the competition,” Kelly said.