Victoria’s decision to block onshore unconventional gas developments, and continue the moratorium on conventional gas development, is short-sighted and ignores the important role gas will play in supporting renewables integration and reducing carbon emissions as the energy sector transforms, the energy industry said today.
The Australian Energy Council’s Chief Executive, Matthew Warren, said that developing Victoria’s gas reserves is critical to maintaining downward pressure on both energy prices and carbon emissions.
“Gas has half the carbon emissions of coal, and delivers flexible, reliable energy at times when renewable sources may be unavailable.
“The Victorian Government’s plan to install over 5,000MW of wind generation will mean that Victoria’s electricity system will be increasingly reliant on gas as a flexible back-up fuel. Scarce gas supplies will make this more challenging, as we saw in South Australia last month, where spot gas prices peaked at almost $30/GJ, or up to five times long-run prices.
“At the recent COAG Energy Council meeting all states – except Victoria - confirmed the importance of gas development and agreed to work collaboratively to develop Australia’s valuable and abundant onshore gas reserves,” said Mr Warren.
“In blocking the exploration and development of all onshore unconventional gas in Victoria, the Victorian Government is succumbing to populist sentiment on fracking, a gas extraction method which expert reports have consistently found to be safe when conducted appropriately.
“This is a very disappointing response from the Victorian Government, and can only mean bad news for its energy prices and gas supply into the future.”
About the Australian Energy Council
The Council represents 22 major electricity and downstream natural gas businesses operating in competitive wholesale and retail energy markets. These businesses collectively generate the overwhelming majority of electricity in Australia and sell gas and electricity to over 10 million homes and businesses.
A major Australian Competition and Consumer Commission (ACCC) investigation has confirmed what the energy industry has long-known - that moratoria and over-regulation of unconventional gas fields are exacerbating uncertainty and increasing prices.
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