Gas disaster just part of the energy mess

Welcome to the rest of your lives. The gas crisis is going to get worse because Australia has quite deliberately and specifically reduced supply.

The gas crisis in Australia is going to get worse.

Gas. Yes, it’s been swept by a perfect – but hardly, a sudden - storm. Gas – and oil and coal – have also been swept by perfect, widespread, deep and sustained, stupidity. Welcome to the rest of all your lives.

Yes, the future has come suddenly and painfully. It is exactly the future that doing without fossil fuels – oil, gas and coal – will be. It is only going to get worse, much worse. It’s utterly pointless trying to analyse the sudden explosion in gas prices and the very real prospect of shortages, if not actual rationing, in terms of specific drivers, like the Russian invasion and Europe being forced to some sort of embargo on Russian oil and gas. All that does is play analytical whack-a-mole.

The single over-riding cause of what’s happened with gas – and with oil and coal – is the eternal reality of supply and demand.

If demand exceeds supply, the price goes up.

What ‘we’ve’ done – and I use the ‘we’ more broadly than just governments in Australia, although they are overwhelmingly to blame for our local plight – is to quite deliberately and specifically reduce supply.

To stop the search for oil and gas; to stop development; to make it all-but impossible to build a coal mine – even for export: will Adani be the last under the present all-pervasive lunacy?

And as for a coal-fired power station? Indeed, will any of the existing ones still even be open in 2030, in this rapidly accelerating slide to meaningless and utterly pointless CO2 emissions target dates, but to all too-real national suicide?

‘We’ve’ done two broad things to reduce supply of gas into the Australian domestic market.

All those bans on finding and especially fracking it, combined with letting all the massive amounts of gas found and developed across northern Australia to be almost entirely sold into the export market. It would have been feasible, economic and entirely appropriate to have ‘reserved’ specific portions of every gas field; and at fixed and relatively low – reasonable – prices. As happened, most spectacularly with Esso-BHP’s Bass Strait, which gave Victorians – consumers and industry both – half-a-century of cheap, reliable and plentiful gas.

But it would only have been, and would only be now and going forward, feasible and reasonable, if governments were actively pro-gas: that’s pro-gas finding; pro-gas development and pro-gas use.

Governments had to – and should, now – encourage gas; and sweep away all the costly red, green and black tape that makes project development so horrendously expensive and so lengthy., if even possible.

We really could have, we really can have, our gas export cake and get to ‘eat it’, cheaply, domestically.

Now, in a reasonable, sane world, that would extend into power generation more broadly, including – if we were still stupid enough – a power generation future built on sweeping reductions in CO2 emissions.

Yet here we are stumbling blindly into the generation space.

Yes, we want gas to anchor future generation – well, most of us with IQs above 50 do. But ‘we’ don’t want to provide secure, if indeed any, supply.

Meanwhile, ‘we’ are doing everything to drive the coal-fired stations out of business as quickly as possible.

Then there’s a whole parallel story with oil. All of the above applies, and then some.

We still want it desperately. To borrow the old Ford slogan: have you driven an EV lately? And if so, what do you think you are plugging it into; what do you expect to be plugging it into tomorrow?

We’ve also let all the refineries – bar two – close, belatedly and ineptly paying those two $2bn to stay open.

Gee. I wonder what it would be like if the tankers stopped arriving, the gas stopped flowing and the last coal-fired station had just closed?

Originally published as Gas disaster just part of the energy mess