PM supports RISC’s view of using gas as a solution to climate change and emissions reductions in Australia in his call for an end to onshore moratoria

PM calls for end to onshore moratoria

Source: Energy News Bulletin | 29 January 2020

PRIME MINISTER Scott Morrison has announced that one of the solutions to climate change and emissions reductions in Australia is to unlock the gas supplies beneath the ground in the eastern states, suggesting more gas from Victoria and New South Wales will help the nation transition to renewable and meet its Paris commitments.

“We need to get the gas from under our feet. There is no credible energy transition plan for an economy like Australia, in particular, that does not involve the greater use of gas as an important transition fuel,” he said.

“We need to get the gas from under our feet. There is no credible energy transition plan for an economy like Australia, in particular, that does not involve the greater use of gas as an important transition fuel,” he said.

The speech has, predictably, been championed by industry and lobby body APPEA and slammed by activists and others horrified at his pro-fossil fuel stance as the nation battles enormous bushfires across the east coast they see as linked to Australia’s fossil fuel industry.

“There are plenty of other medium or long-term fuel arrangements and prospects, but they will not be commercially scalable available for at least a decade is our advice,” Morrison said.

The head of the Australasian Centre for Corporate Responsibility Brynn O’Brien called Morrison’s speech “sickening, chilling” in a tweet.

“It’s important for Australia’s oil and gas industry to be recognised for the positive role it is and can play in the broader energy and emissions reduction debate. Natural gas is the perfect complement to the growing use of renewables and will continue to be so for decades come,” APPEA CEO Andrew McConville said.

Morrison’s stance isn’t news to industry, or those who oppose it.

The federal government, with backing from the Australian Consumer and Competition Commission, has long pushed for an end to state moratoria, explaining the issue as one of large-scale supply for the manufacturing industry than emissions reductions.

The review of the Australian Domestic Gas Security Mechanism, released Friday again suggested to shore up the supply shortfalls predicted for the east coast market as soon as 2023, and keep prices low enough to keep manufacturers in business, states should encourage onshore exploration.

That review has also suggested a national domesetic gas reservation scheme.

Victoria doesn’t allow any onshore drilling, save onshore-to-offshore drilling. New South Wales imports 95% of its gas and South Australia instituted a 10-year fraccing moratorium in part of the state when the Liberal government came to power in 2018, dropping ten spots in Fraser Institute rankings in a year as a result.

Morrison’s suggestions of gas as backup to renewables isn’t an entirely popular suggestion for either side of politics, with activists wishing to see an end to all fossil fuel use as soon as possible and industry preferring to be of more use than as a fast bridge to cheaper batteries.

“Gas has a critical role to play, as a back-stop to our record investment in renewable energy generation. It helps ensure we can keep the lights on when the wind isn’t blowing and the sun isn’t shining,” the PM said today.

“Gas can help us bridge the gap.”

“Natural gas has a key role to play, and not just when the wind isn’t blowing and the sun isn’t shining,” McConville said, hinting at industry irritation at being relegated to transitional backup fuel until batteries become cheaper.

Gas use in the east coast electricity mix has been on the decline for some years, but he is right to point out that might change, though only drastically after the coal-fired plants his government wish to keep online, such as Liddell, retire in the coming two to eight years.

Multiple EnergyQuest reports suggest gas’ declining share as wind and solar power use soar. There are some monthly variations such as this December just gone, but on the whole renewables’ use has increased, gas-fired generation has gone down and coal still supplies over 70% of baseload power in the National Electricity Market.

But there are holes in the system.

A presentation by RISC at Perth’s Good Oil conference in September suggested just one truly hot day that drove air conditioner use up while depressing wind conditions – as was seen last summer in Victoria – could drive rolling blackouts if gas-fired generation cannot step into the breach. 

This will become a more serious issue once ageing coal assets begin to retire next decade. Principal analyst Joe Collins said then that Victoria is about “to walk off a cliff”.

When the wind doesn’t blow in South Australia gas demand shoots up fast.

Similarly, on high power demand days in Victoria, gas-fired power demand spikes, and the state saw two of the highest demand days in its history in 2019.

“This is what’s driving it and it will continue to drive the gas shortage and it will get worse.”

Collins suggests as brown coal could be out of Victoria’s power mix by 2030 and with wind providing 40%-50% of the state’s power, about 600 terajoules more of gas than is currently used could be needed, which is more than ‘backup’.


RISC has spoken at multiple industry conferences on the importance of gas as a transition fuel to move towards a lower emissions future. To view Joe’s presentation please click here, or contact us for more information.

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