Energy minister Chris Bowen deserves high praise for telling Australia the politically incorrect truth – that we need gas to support our accelerated roll out of renewables.
It could not have been easy for Bowen to tell the truth because it contradicted his previous statements and the “we need gas” truth does not accord with the view of many in the cabinet and the ALP supporter base.
As my regular readers know, over the years Bowen and I have often had different views. In Australia, it is rare for a minister to reverse previous statements.
Accordingly, Bowen rises dramatically in my estimation, and the nation could do with more federal and state ministers with that sort of courage.
Australia’s new gas policy means both the government and opposition have similar gas policies, and that suddenly puts Victoria in a position where it is holding the east coast of Australia to ransom by stopping development of its immense low cost onshore no fracking gas reserves.
Fascinatingly, the last time Victoria held the nation to ransom over gas was in the 1960s, soon after gas was discovered in Bass Strait. The then Premier, the late Henry Bolte, wanted to keep the gas for Victorians and to use cheap, reliable energy to boost industry in the state.
It worked and Victoria got a great boost, but eventually the gas was shared with NSW and other states, and we have an east coast pipeline grid.
It is time for Canberra to get much tougher with the delinquent Victorian state, which keeps crying poor when it in fact is not using its enormous riches.
If Victorians wants higher unreliable energy prices, I guess that’s their business, but there is no reason why the existing pipelines should not be used to send Victorian gas to NSW and Queensland who understand the value of gas to lower emissions while keeping reliable energy prices low.
Victoria can encourage its industry and people to follow its energy and go north.
Meanwhile, Victoria can still benefit from is the remarkable attributes of its gas, which is dissolved in deep water. In Queensland, the water that is produced with gas is not suitable to grow crops but the water that contains Victoria’s gas needs very little if any treatment to be used to grow carbon absorbing plants and to revolutionise parts of Victoria’s agriculture, including making it drought proof.
Bowen’s current energy policy still insists that nuclear is too expensive. It is certainly a lot more expensive than a Latrobe Valley gas fired power from the incredibly low-cost Victorian gas. But BHP has shown that Canadian nuclear power is much cheaper than current Australian power costs. .
By using Victoria’s low carbon gas not only can we remove coal from the power equation but suddenly by not rushing nuclear we can watch a nuclear revolution taking place that is led by China.
The world’s second-largest economy now operates nuclear submarines using molten salt cooled thorium, and the same fuel is being used in container ships and also new power stations. It looks to be the future if nuclear, so it makes sense to wait.
My regular readers know the detail of Victorian gas and the fact that former Premier Daniel Andrews gave a carefully selected committee $42m with the instruction to look for gas on shore in Victoria, but that instruction carried a strict caveat – they were forbidden to look where one of the world’s leading gas reserve estimators.
MHA Petroleum Consultants, (now part of the giant Sproule group) had calculated Victoria gas reserves totalled 4.996 trillion cubic feet of gas.
That’s some 60 per cent of the last 50 years of Bass Strait production. Better still there was a “high” estimate of reserves at 12.6234 TCF which would make the Victorian reserves second only to the North West Shelf. Lakes Oil also has onshore gas, and its reserves were also in forbidden territory.
The Andrews Committee pocketed the money and dutifully reported Victoria has no on shore gas. Publication of the MHA calculated reserves was removed from government web sites.
The gas was first discovered when Victorian brown coal fields were being mapped in the decades leading up to the 1950s. Decades later, with Bass Strait running down, Exxon in Houston began researching this very deep gas that is dissolved in water and sent the data to MHA.
The first proposal to develop the gas included Esso and BlueScope in the consortium and was put to the then Coalition Premier Denis Napthine in 2014. Napthine incorrectly thought it involved fracking and would hurt farmers, so rejected it prior to the election he lost.
That first proposal emphasised that further wells (about six) must be drilled to make sure that production and permeability will duplicate the first test wells. But Exxon were so confident that they planned to spend $200m (in 2014) on the project, arranged for BlueScope and other major gas users to pencil intent contracts and signed six agreements with local landholders who would benefit from the development.
In the decade that followed Andrews and his energy minister Lily D’Ambrosio, must have known that fracking was not required and because the gas was on the national pipeline and next to the Exxon treatment plant the costs were very low. As a result, they had to be able to deny its existence to keep green seats.
To get Victoria to comply with national policy may require punishment. And also required, is a local media that is not engulfed by Victorian government propaganda.
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