Does Australia have a gas shortage?

While businesses and households are getting slugged with high gas prices, a new report says it has little to do with the gas shortage sited by the market operator.

Melbourne University’s Climate and Energy College challenged the forecast made by the Australian Energy Market Operator (AEMO) in March, which said the nation would a shortfall of gas supplies within 18 months, while questioning its call for new coal seam gas fields as solutions.

Report author Tim Forcey said AEMO did its best to look into the future but given the “opaqueness” of the gas industry, it worked with limited information.

“AEMO modelled a scenario that produced a tiny-tiny-nearly-imperceptible imbalance between forecast gas demand and supply,” Mr Forcey said.

“A lot of people right up to the Prime Minister got excited, more excited than they should have because AEMO’s gap has already disappeared.

“Just 11 days after AEMO called ‘shortfall’, AEMO then reduced their demand forecasts.That gap everyone got excited about is already gone. It was a short-lived shortfall.”

‘Confected gas crisis’

Lyndon Schneiders

Lyndon Schneiders

“Australia does not need more gas, it’s as simple as that,” said Wilderness Society director Lyndon Schneiders.

“The Australian Energy Market Operator’s predicted gas shortage was miniscule and this University of Melbourne report shows it does not exist.

“We don’t have a gas supply crisis, we have a gas price crisis, and more gas is not going to reduce domestic gas prices as they are now linked to the international market thanks to the multinationals exporting our gas.

“Australia’s gas production has more than doubled since 2015 yet gas prices have tripled, crippling households and the manufacturing sector.”

Rather pushing gas expansion, Mr Schneiders said the government should embrace a rapid transition to renewable energy sources, such as wind and solar.

“AEMO and the Turnbull Government have used this confected crisis to push gas expansion, backing such environmentally destructive gas schemes as Santos’ Narrabri coal seam gas project,” he said.

Gas Industry response 

Chief executive of gas industry body APPEA, Malcolm Roberts, said the Melbourne University report clearly had an anti-gas agenda.

“The report was commissioned by anti-gas activist groups Lock The Gate and The Wilderness Society,” Dr Roberts said.

“Does it surprise anyone that these groups now deny there’s a gas shortage?

“Common sense dictates the only solution is to develop more gas.

“The anti-gas scare campaigns mounted by these groups are a big reason eastern Australia now faces a gas supply shortage.”