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Ban would cut off 40-year gas supply to east

A Victorian ban on gas ­exploration would cut ­reserves big enough to supply the east coast for almost 40 years.

Australia will exceed Qatar as the biggest exporter of LNG within a few years.
Australia will exceed Qatar as the biggest exporter of LNG within a few years.

The Victorian Labor government’s proposed ban on gas ­exploration will shut off gas ­reserves big enough to supply the east coast of Australia’s gas needs for almost 40 years.

Victoria’s Gippsland and Otway Basins together contain 27 trillion cubic feet of shale and tight gas reserves — more than double the currently identified total for Australia, according to new estimates from Geoscience Australia released yesterday.

The Andrews state government, backed by the Liberal opposition, intends to permanently ban fracking, a technique for ­extracting shale, tight and coal- seam gas. The ban, which was introduced into the parliament in November and includes a moratorium on exploration for conventional gas until 2020, has been criticised by business but strongly supported by farmers.

“I keep hearing from the state government that there are no gas reserves here but there are,” federal Resources Minister Matt Canavan said while touring ­regional Victoria yesterday.

“All I’ve heard today from small to large businesses is they can’t get access to reliable gas at any price.’’

The latest geographical energy supply inventory could embarrass Victoria’s Resources Minister, Wade Noonan, who wrote an ­article yesterday, saying: “Despite some claims, there are currently no proved or probable onshore gas reserves in Victoria, and this follows many years of commercial exploration.”

Mr Noonan yesterday announced $10 million in funding to investigate onshore conventional but not unconventional gas ­reserves.

Victoria is the only state to have legislated a ban on fracking, but there is a moratorium in place in NSW. Coal-seam gas production, a third variety of unconventional gas, has taken off in Queensland as miners scramble to take advantage of rising global gas prices. Australia will exceed Qatar as the biggest exporter of LNG within a few years.

The new report follows a series of blackouts in South Australia that have intensified debate about the future of fossil fuels, such as gas and coal, in Australia’s power supply. Labor and Greens want to see at least half of Australia’s power supplied by renewable ­energy by 2030, which would see a declining role for gas, while the Turnbull government wants Australia’s rich coal and gas deposits to stay an important part of the mix.

“Getting access to gas is the single most important part of ­energy market reform in Australia right now, if you want to build more renewables, as Victoria does, you’ll need more gas to complement it,” said Matthew Warren, chief executive of the Australian Energy Supply Association.

“Victoria has the advantage of having its unconventional gas ­reserves close to market, so it’s an attractive place to develop gas.’’

Geoscience Australia said there was a high degree of uncertainty surrounding Australia’s large volumes of gas, with resources “poorly understood and quantified”.

Mr Canavan said he wasn’t surprised with the geoscience estimate, noting Victoria was geographically similar to parts of the US where shale gas was plentiful.

Adam Creighton
Adam CreightonContributor

Adam Creighton is Senior Fellow and Chief Economist at the Institute of Public Affairs, which he joined in 2025 after 13 years as a journalist at The Australian, including as Economics Editor and finally as Washington Correspondent, where he covered the Biden presidency and the comeback of Donald Trump. He was a Journalist in Residence at the University of Chicago’s Booth School of Business in 2019. He’s written for The Economist and The Wall Street Journal from London and Washington DC, and authored book chapters on superannuation for Oxford University Press. He started his career at the Reserve Bank of Australia and the Australian Prudential Regulation Authority. He holds a Bachelor of Economics with First Class Honours from the University of New South Wales, and Master of Philosophy in Economics from Balliol College, Oxford, where he was a Commonwealth Scholar.

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Original URL: https://www.theaustralian.com.au/business/in-depth/future-of-resources/ban-would-cut-off-40year-gas-supply-to-east/news-story/ee8c3a6d38ec389636cf7173c9f89d58