Gas supplies secure until at least 2023 - AEMO
27 March 2020
Joint media release with Minister for Resources, Water and Northern Australia, The Hon Keith Pitt MP
Australia’s domestic gas supplies are secure for at least three years, but more gas will be needed in the southern states to meet demand in the longer term, according to a new report by the Australian Energy Market Operator (AEMO).
The AEMO’s Gas Statement of Opportunities report for 2020 found domestic gas supplies are secure until 2023, but supply in the southern states is set to fall by 35 per cent over the next five years unless new gas resources are developed.
Minister for Energy and Emissions Reduction Angus Taylor said the AEMO report underlined the essential role state governments can play to solve this problem by bolstering the supply of gas and removing restrictions on exploration and production.
“It is very clear that the best way to solve the potential gas shortfall is to increase supply,” Mr Taylor said.
“While there has been some progress - NSW has agreed to add an extra 70 petajoules to the gas market and Victoria will lift their moratorium on unconventional gas exploration and development in 2021 – consumers need more certainty.
“The Government has made gas a key focus of energy deals done with states and territories. The principle is: no gas, no cash.”
Minister Taylor also noted that the progress the Government has made to secure extra supply has not come at the cost of increasing prices.
AEMO, the Australian Energy Regulator (AER) and the Australian Competition and Consumer Commission (ACCC), have confirmed that wholesale prices have already fallen from their peak in 2017.
East coast prices fell on an average of 26 per cent over the 12 months to the end of 2019, which means more money in consumer pockets. This is essential important during this difficult time for all Australians.
The Government’s measures, including the recently agreed COAG transparency measures, the ongoing investigation into pipeline regulation, and the extension of the Gas Supply Guarantee aim to improve the medium-term outlook. However, they cannot be fully effective without cooperation from industry and the states.
Minister for Resources, Water and Northern Australia Keith Pitt welcomed recent progress in New South Wales and Victoria.
“We have seen some encouraging signs recently in the southern states,” Mr Pitt said.
“As we have seen repeatedly, gas development closest to demand centres is the best way to secure lower prices for consumers. I would encourage southern states to follow the lead of Queensland, to follow the advice of more than 15 science-based independent inquiries and to listen to what regulators all say – that unconventional gas can be developed safely and deliver enormous benefits to local communities and to manufacturing.
“The Australian Government continues to take decisive action to secure affordable gas supplies for Australian households and businesses.
“The Government’s Australian Domestic Gas Security Mechanism (ADGSM) and Heads of Agreement with LNG exporters continue to be effective in boosting domestic gas supply and easing market pressures. And we are considering options to establish a national gas reservation scheme for new projects.”
With the challenges that Australia and the world face from COVID-19, Australia’s gas and broader resources sectors have an increasingly important role to play in providing secure and affordable energy supply and to lead the bounce-back of the Australian economy.
Minister Taylor’s office 02 6277 7120
Minister Pitt's Office 02 6277 7180