Crisis, what crisis?

Matthew Wright, executive director, Zero Emissions Australia

Gas crisis! NSW to suffer from shortages within five years. That’s the story being peddled by the big fossil gas companies, AGL, SANTOS, Dart or Origin.

This is a scare campaign with no basis in fact. The public is being completely misled with a lot of postulating and huff and puff from the coal seam gas (CSG) industry, which is desperate to develop as much gas as it can and ship it out to Asia at high Asian prices.

The gas miners just want to make as much money as possible exporting gas, and they’re using gas consumers, large and small, as leverage by pretending that open slather on developing coal seam gas projects will lower prices to pre-2008 levels and solve this nonexistent emergency.

Gas supplies less than 10 per cent of NSW energy demand and historically that has all been imported from South Australia’s Cooper Basin via Moomba and Victoria, Mr Wright said.

NSW never supplied its own gas, was never self-sufficient and therefore cannot run out. The supplies that are already connected and available to NSW consumers from Victoria and South Australia aren’t about to run out any time soon either.

The push for developing more gas fields is about exports, fossil gas exports at prices that are 300–500 per cent greater than historic domestic prices and with an open, unregulated market (as exists with petrol) the price will no longer be set here in Australia.

Analysis by Zero Emissions shows that no matter how much gas is brought online, the price of domestic gas will not drop below the current local price of around $8–$9 a gigajoule.

Fossil gas exporters can rely on a minimum international gas price of $12 a gigajoule (it costs them $3 per gigajoule to export the gas). At the moment they can sell that gas for as much as $17 a gigajoule on the global market. Given they will be able to buy Australian gas at $8–$9 per gigajoule, they have an incentive to buy up as much Australian gas as they can get their hands on. And if the price falls below $9 a gigajoule then that will just trigger the fossil gas industry to build the next LNG train and there are up to 22 of those in the pipeline.

Fossil gas companies are not charities by any stretch of the imagination. There is no way that they are going to set aside gas for domestic consumers, who want long-term contracts at (the old price) $3–$6 dollars per gigajoule, when they can sell that gas overseas for $12–$17 dollars per gigajoule.

Anyone such as Chris Hartcher (NSW energy minister) or the Australian Petroleum Production and Exploration Association (APPEA), or the Energy Supply Association of Australia (ESAA) campaigning for more domestic gas to be brought online is doing a benevolent act for the coal seam gas export industry, an industry geared up for providing international consumers, who will pay higher prices, with gas, not Australian gas consumers.

If you could imagine a new oil field as big as the super fields in South Australia coming online in Tasmania or in the Great Australian Bight, it wouldn’t lower petrol prices at your local service station, it wouldn’t change that one iota as the price is set in Singapore, London or New York. The same goes for gas; once we’re linked to international markets that is the price the domestic industry will have to pay, the Asia price, the global price. And remember the domestic gas industry is the oil industry: they’re the oil and gas industry, peas in the same pod.

Do not be fooled by the fossil gas miners; they’re not here to give Australia a competitive advantage. Only renewable electricity generators can do that as there is no way to export renewable electricity.

The future is clean zero emissions renewable energy, that doesn’t cost the Earth.