Homes and businesses in south-eastern Australia are facing a heightened threat of gas shortages this winter due to a cold snap boosting energy demand and an unplanned outage crippling gas supply from Bass Strait.
The Australian Energy Market Operator (AEMO) has dialled up its warnings of a gas crunch this week, issuing a “threat notice” about the potential for gas to run short in Victoria, New South Wales, South Australia, Tasmania and the ACT until the end of September.
“The supply of gas in all or part of the east coast gas system may be inadequate to meet demand,” the AEMO notice said.
Gippsland Basin gas fieldsCredit: Photo: James Davies
The warning comes amid a rapid depletion of gas supplies from the 50-year-old Gippsland Basin gas fields in Bass Strait, which have traditionally supplied the bulk of eastern Australia’s domestic gas demand.
While Australia is one of the world’s biggest gas exporters, supplying vast quantities of the fossil fuel from Queensland and Western Australia to buyers in Asia, rapid declines in the Bass Strait fields owned by ExxonMobil and Woodside have triggered warnings from AEMO of domestic shortages on days of extreme winter demand from as early as this year.
AEMO is forecasting that the entire east coast market is on track to be in a yearly deficit by 2028 without major investments in new gas fields, upgrading pipelines or commissioning special shipping terminals to begin importing liquefied natural gas (LNG).
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As higher-than-expected gas use for power generation draws down stockpile levels at Victoria’s Iona storage facilities, the AEMO notice this week calls on Queensland gas producers to maximise the gas volumes they are sending to southern markets and urges industrial gas users to assess their gas requirements.
Australia’s enduring reliance on gas – a major source of greenhouse gas emissions that are dangerously heating the planet – has come into sharper focus as governments step up commitments to decarbonise. Policies banning gas hook-ups in new residential buildings and encouraging people to switch gas appliances to electric alternatives are successfully driving down long-term gas demand forecasts.
However, the shift is not happening fast enough to avert the threat of shortfalls for a fuel that remains widely used in heating, cooking, power and manufacturing, AEMO warns.
In Victoria, where more than 2 million homes and businesses use gas – the most of any state – available gas supplies are expected to fall 48 per cent by 2028.