Australia’s energy market operator, AEMO, is predicting a gas supply squeeze in Victoria and NSW by next year due to declining output from gas fields in Bass Strait, which once supplied 40 per cent of the east coast’s needs.

Although the Victorian government has committed to net zero emissions by 2050, much of the focus has been on transitioning to renewables and not the future of gas, said Tony Wood, the energy and climate change director at the Grattan Institute.

“Putting solar panels on your roof is one thing but replacing all the gas appliances in your home is much more challenging,” Mr Wood said.

Later this year the Victorian government will release its gas substitution plan, plotting the transition away from gas. This will include more efficient use of gas, electrification, reduced fugitive emissions and increased use of alternative gases, such as hydrogen and biogas, a spokesperson said.

Residents would have an opportunity to raise concerns about the Corio Bay project through the planning process, they said.

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Viva Energy’s proposal at the refinery’s existing 235-hectare industrial site, is one of several proposed LNG import terminals across the south-eastern seaboard. The most advanced of these is billionaire Andrew “Twiggy” Forrest’s Squadron Energy import terminal at Port Kembla, which is under construction. Gas from this terminal would need to be piped south to Victoria.

The proposed Viva import terminal had the advantage of being able to scale up or down according to demand and could be removed when no longer required, unlike a long-distance pipeline, Mr Wood said.

Environment Victoria campaigns manager Greg Foyster, who lives in Geelong, said the city was at an “energy crossroads”, with renewable projects, including Victoria’s biggest battery on the city’s doorstep in nearby Moorabool, at odds with the gas terminal proposal.

“Building a gas import terminal takes Victoria in entirely the wrong direction,” Mr Foyster said. “We should be investing in renewable energy and storage, not more big polluting fossil fuel projects.”

Environment Victoria is not convinced there is a looming gas shortage.

Analysis it commissioned last year found there was enough gas supply capacity in Victoria until 2027. Over the following three years there would be a shortfall of between 26 and 85 petajoules, but the adoption of gas-demand reduction measures, like energy efficiency and electrification, eliminated the forecast shortfall, it found.

Viva Energy’s chief business development and sustainability officer Lachlan Pfeiffer said it was predicted there would be gas shortfalls on cold winter days in 2023.

“This is about filling that gap until the end of the decade and bringing in a new supply source,” he said.

“This is very much not about gas versus renewables. We are fully supportive of renewables coming into the system, but you will absolutely need both in the transition in the short to medium term.”

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Graeme Bethune, the chief executive of energy advisory firm Energy Quest and chairman of the Australian Gas Industry Trust, said a considerable amount of gas would still be used in Victoria by 2030.

“In energy, things take a long time to change. You can’t turn the ship around on a five cent piece,” he said.

Mr Bethune said his firm had made similar predictions to AEMO about a gas shortfall.

Viva is yet to determine where the gas would come from, but Woodside Petroleum has inked an accord to potentially use the proposed terminal to import gas from its controversial Scarborough gas project in Western Australia.

Mr Pfeiffer said the Viva proposal would go through a rigorous safety assessment, a full Environment Effects Statement and be regulated by WorkSafe and the Environment Protection Authority.

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