Matthew Guy to deliver cheaper energy by exploiting Victoria’s vast gas reserves: Robert Gottliebsen

Victorian Liberal opposition leader Matthew Guy, who is behind in the opinion polls, has taken one of the most politically incorrect decisions any politician can make: he is offering to reduce the energy costs for some 2.2 million Victorians by supplying them with the “unmentionable” – Victoria’s vast reserves of natural gas.

No other political leader outside Western Australia has access to such immense reserves of gas, but the mere mention of the word “gas” will send inner-city greens, including many residing in current Liberal seats, into a frenzy.

I have always seen Victoria’s immense reserves of low-cost gas as available to the eastern part of the nation, but Guy plans to use them only in Victoria to help lower voters’ living costs and boost parts of Victorian industry by giving them an advantage over the rest of the world. This will annoy the Commonwealth government.

But the Victorian Liberal Party policy statement does not actually mention where in Victoria the gas will be found. Guy is clearly on the edge of his seat waiting for Victorian Premier Daniel Andrews to ask: “where will the gas come from Mr Guy?”

Let’s put together how such a theoretical exchange might proceed:

Andrews: “I spent $42m on an expert committee, which set out in writing that Victoria was most unlikely to find onshore natural gas. I rely on the experts.”

Guy: “I too rely on the experts, but my experts start with Exxon, which discovered the existence of the gas, and the actual calculation of the reserves has been made by one of the world’s most reputable gas reserve estimators, MHA Petroleum Consultants, now part of the giant Sproule Group in the US.

“And Mr Andrews, your expert panel was specifically forbidden to look in the parts of Victoria where you knew that MHA/Sproule had calculated the reserves. It was a complete farce, costing Victorians $42m.

“That farce not only misled the local press but confused the Commonwealth’s government energy regulators.”

In the official Liberal policy, Guy sets out that landowners have to agree to the gas development and will be provided with a 10 per cent share of the royalty that is paid to the government.

Naturally, the Liberals say the ban on fracking continues because Victoria’s gas reserves are unique in the world – they are very deep and dissolved in water that comes to the surface without fracking.

Victorian Liberal leader Matthew Guy has promised to supply its residents with the ‘unmentionable’ – the state’s vast reserves of natural gas. Picture: Ian Currie/NCA NewsWire

When Gippsland Gas announced their plans to develop the low-cost, onshore gas in partnership with Exxon, the then owners of the Gippsland land were enthusiastic about a similar revenue offer and the fact that the development made their farms drought-proof.

The reserves are held by the Victorian government because Gippsland Gas and Exxon walked away, given all the government shenanigans.

My readers are well aware of the reserves because I have been writing about them for years. Recent articles are on the website under the headings “Getting gas-rich Vic to import costly LNG is ludicrous” and “Australians deserve to know the truth about gas”.

Guy’s decision to concede that he might lose inner-city seats in the interests of the wider population of Victoria deserves high praise.

But these days many of those who want lower carbon emissions also realise the reason we are facing such high energy costs is that state and federal governments have hashed the introduction of renewables and the politicians are now telling us that another 50 per cent rise in energy costs is required to rectify the mess that has been created.

Victorian gas can improve the economics of the state’s renewable installations because development enables a gas-driven generator to provide low-cost back-up power and perhaps enable the highly polluting brown coal generators to close earlier without sending power prices through the roof.

Even more importantly, the water that comes to the surface with the gas can be used to grow saltbush and other carbon-storing plants, so a large part of the gas emissions can be stored in the ground.

And this can kickstart regenerative agriculture in Victoria and then Australia. We can become a massive carbon storage island by using deep-rooted plants like saltbush.

Victoria’s unique gas has the potential to actually accelerate emissions reduction in Australia. But many inner-city residents prefer paying higher prices than using intelligent means for fast reduction of carbon emissions.

Of course, there is a caveat in the development of these vast reserves. The reserves themselves were discovered by Exxon experts in Houston, Texas, who studied the 20,000 or so wells drilled in the Victoria’s Gippsland basin in the 1930s, 1940s and 1950s to determine where best to mine Victoria’s brown coal and also to look for oil.

At the time, the deep gas discovered in these wells was thought to be useless, and later Bass Strait was discovered.

MHA/Sproule estimated the reserves, but about six low-cost wells are required to confirm that the deep water/gas mixture will flow easily to the surface.

When Exxon was looking to develop the gas and committed $200m in conjunction with Gippsland Gas and BlueScope, it did not see a problem with permeability. But it still needs to be tested.

Meanwhile, if Andrews wins the election, then Victorians should not complain about high energy prices – they had their chance.