Gas supply shortfall is bad for jobs, energy security and the environment

By demonising gas, the lower-emissions option for coal, climate agitators have ensured there will be a bigger role for the highest-emissions option, diesel fuel. The clue was there when the South Australian grid collapsed after it lost connection to the brown coal-generated supplies from Victoria in 2016.

To ensure there was no repeat, the SA government installed a fleet of diesel generators to carry the state over summer. According to the latest Australian Energy Market Operator report, it is possible we will be forced to repeat the exercise nationally due to a well-forecast but looming shortage of gas supplies for the east coast market. The AEMO revealed that gas generators may have to run on diesel through to 2026 during ­periods of high demand due to the lack of gas on the east coast.

The demand shortfall is the result of a steep but expected drop-off in offshore gas from Victoria’s Bass Strait, and obstructions to the development of reserves, particularly in NSW and Victoria. The AEMO has forecast risks of shortfalls from 2025 and the potential for small seasonal supply gaps from 2026, predominantly in southern Australia, ahead of annual supply gaps that will require new sources of supply from 2028. Gas consumption by residential, commercial and industrial consumers is forecast to decline, but production in the south is forecast to decline faster. At the same time, demand for gas is expected to increase significantly as coal-fired generators are forced to exit.

Even the trade union movement has got the picture. The Offshore Alliance, representing the Australian Workers Union and the Maritime Division of the Construction, Forestry and Maritime Employees Union, says attempts by activists to delegitimise gas as “the new coal” fail to understand Australia’s practical need for gas well into the future.

AWU national secretary Paul Farrow makes the obvious point that demonising gas is narrow-minded and unhelpful. If we want renewables to expand, not just in Australia but across the globe, we need to help firm the grid and ensure the energy reliability that heavy manufacturing requires. Gas is perfect for the role. Denying development of gas reserves has real-world implications on jobs and economic security, as well as regional security and the wellbeing of our trading partners.

As the AEMO report shows, refusing to accept the obvious benefits of gas will also result in a worse outcome for emissions, energy security and the wallet.