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Victoria is the largest consumer of residential gas in Australia, which accounts for about 15 per cent of the state’s greenhouse gas emissions.

Graeme Bethune, chief executive of Australian energy consultancy EnergyQuest, says the Bass Strait reserves are rapidly declining and piping in gas from the larger fields in Western Australia or the Northern Territory is prohibitively expensive.

He acknowledges the tension between energy security and reducing emissions: “It’s a matter of how you turn the ship around, and inevitably you can’t do it overnight.”

A floating gas terminal, such as one proposed by Viva Energy for Geelong, which could import gas into Victoria, could be a more appealing short-term way to address a gas shortfall, Mr Bethune says.

Not everyone is convinced there is a looming gas shortage. Environment Victoria analysis found there is enough gas supply capacity in Victoria until 2027. Over the following three years there is a shortfall of between 26 petajoules (PJ) and 85 PJ, but the adoption of gas-demand reduction measures, like increasing energy efficiency and electrification, eliminates the forecast shortfall.

In March last year, the Labor government overturned a long-held moratorium on conventional onshore gas exploration, though fracking remains banned. Friends of the Earth spokesman Cam Walker says the Beach Energy proposal is significant because Victoria has not had any onshore gas development since 2014.

“Gas as a transition fuel [away from coal] is an argument from the 1990s – it’s clear from the climate science that the time for new gas is over,” Mr Walker says. “Gas is in rapid decline, particularly in the Bass Strait, and we need to get off it as a matter of urgency.”

Later this year the Victorian government will release its gas substitution plan, which it says will detail decarbonisation of the gas sector while ensuring residents have reliable energy.

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For now, it is supporting gas exploration. Last week the government and opposition voted down a motion from Greens deputy leader Ellen Sandell that would have prevented the Beach Energy plan. It still requires approval from the state’s resources regulator.

“We need to protect our environment and precious animals by transitioning away from fossil fuels, not drilling for more of it,” says Ms Sandell.

In a statement, Beach Energy managing director Matt Kay says that even as Australia moves to more renewables it will continue to need natural gas into the future.

“With supply shortfalls forecast in Victoria as early as 2023, the natural gas coming from Enterprise [the project] is sorely needed,” he says.

A Victorian government spokesperson says the state is decarbonising its economy at the most rapid rate of any major jurisdiction in Australia, and since 2014 had cut emissions by 25 per cent.

“The government is intent on solving the next big emissions challenge in the energy sector by developing a Gas Substitution Roadmap,” the spokesperson said. “We are the only state to do this important work and we stand to reap significant benefits as a result.”

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