A global exploration company’s decision to cease its search for new gas supply in Victoria’s Otway Basin is a major blow to the state’s energy security and will compound looming gas shortfalls in eastern Australia.
Australian Energy Producers Chief Executive Samantha McCulloch said the announcement from seismic surveyor TGS highlighted the increasingly difficult regulatory and investment environment in Australia, particularly in Victoria where new gas supply is most needed.
“Victoria is facing gas supply shortfalls from 2027 and already came close to running out of gas during peak periods this winter,” Ms McCulloch said.
“With Victorian gas production declining rapidly, immediate action is needed to find and develop the new gas supplies so crucial to eastern Australian homes and businesses.
“Instead, we are seeing increased regulation, long delays to project approvals, and the continued demonisation of gas by the Victorian Government, including the recent decision to force all households to replace gas appliances with electric ones.
“This is scaring off investment and delaying urgently needed new gas supply which will only increase the risk of blackouts, disruptions and higher energy bills.
“Decision-makers must recognise that capital is global and mobile, and Australia is fast losing out to other countries that are actively supporting investment.”
Ms McCulloch said the Federal Government’s granting of two production licenses today to Beach Energy offshore of Victoria was a welcome step to boost domestic energy security, but more supply will be needed.
The Australian Competition and Consumer Commission’s latest quarterly gas inquiry report, released today, shows eastern Australia faces peak period gas shortfalls from next year, and structural shortfalls from 2027.
“The ACCC recognises the efforts of industry to ensure that additional gas is available during periods of peak demand,” Ms McCulloch said.
“But without further exploration and development, future gas shortfalls are almost inevitable.”
Ms McCulloch said activists targeting TGS’ planned seismic surveys were at odds with the science and misrepresented a proven technology.
“Seismic surveys are a safe and essential technology used in Australia and around the world for more than 60 years. It is the same technology used by the offshore wind industry, and the independent national regulator NOPSEMA has found seismic surveys to be safe for the marine environment,” she said.
“The Greens and activists want to stop all new gas developments, with no regard for the devastating impact on Australia’s economy and energy security.
“A recent independent report by EnergyQuest found the Greens’ policy to ban new gas investment would trigger ‘major economic disruption’ on both coasts of Australia, leading to a high risk of blackouts, manufacturers closing and inevitably higher energy prices in a decade.”