NSW energy crisis: Gas shortages could trigger widespread blackouts

QUEENSLAND’S rapidly expanding gas exportation market is being blamed for pushing up electricity prices across Australia as experts fear a gas shortage could lead to widespread blackouts in NSW.

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QUEENSLAND’S rapidly expanding gas exportation market is being blamed for pushing up electricity prices across Australia as experts fear a gas shortage could lead to widespread blackouts in NSW.

The Australian Energy Regulator’s State of the Market report identifies rising gas prices as one of the major factors pushing up electricity prices.

The report finds that the exportation of liquefied natural gas (LNG) has caused “significant disruption” to the domestic market and caused record high prices.

Origin Energy's Central Gas Processing Facility at Condabri, in Queensland.

Queensland supplies 70 per cent of gas in eastern Australia, but a whopping 58 per cent of that is now being exported from Queensland as LNG by exporters such as Origin, Santos and Shell.

The report says that “high gas prices” are now hurting gas-powered generation, which has become “vital” to the “security” of the electricity supply as coal-fired generators exit the market.

The situation is so dire NSW could be facing a serious gas shortage by summer  2018.

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“Conditions in the eastern gas market have raised concerns about the future security of domestic gas supply,” the ­report said.

The Origin Energy Limited LNG facility on Curtis Island in Queensland.

“These issues are emerging more quickly than previously expected, and forecast a possible gas supply shortfall by summer 2018-19 in South Australia, NSW and, to a lesser extent, Victoria.”

From 2016 to 2017 alone the wholesale price of gas in Australia has jumped by more than 57 per cent.

Queensland’s gas exportation market is being blamed for pushing up electricity prices across Australia.

The situation has been slammed as “embarrassing” by leading energy economist Bruce Robertson, who told The Daily Telegraph the “gas cartel” that controls the market was ripping off Australians.

Mr Robertson, from the Institute for Energy Economics and Financial Analysis, said gas producers were making a loss on their LNG exports so they were price gouging the domestic market to make up the profit.

“It’s nothing short of embarrassing that we’re paying more for our own gas than Japan and we should be very angry about it,” Mr Robertson said.