PERTH (miningweekly.com) – The Australian Pipeline Industry Association has called on state governments to act in order to increase gas supply, after a report from the Australian Energy Market Operator (AEMO) revealed a declining demand in domestic gas use.

The AEMO report found that between 2014 and 2019, South Australia, Victoria and Queensland demand would decline, driven by increasing fuel costs which would reduce the reliance on gas powered generation (GPG) gas consumption.

New South wales and Tasmanian demand were expected to grow minimally during this period, mainly as small industry grew in Tasmania and New South Wales shifted from coal to GPG.

When including liquefied natural gas (LNG), Queensland was expected to report the largest annual growth rate, as LNG exports increased.

Australian Pipeline Industry Association CEO Cheryl Cartwright noted that while Australia had sufficient gas to supply both domestic and export markets, appropriate government policies were needed to encourage the development of those gas supplies.

“The AEMO report suggests the major factors influencing the decrease in the use of gas are the price going up due to the large amount of gas that will be required for the export market and the challenges being experienced in accelerating gas production to meet new demand,” Cartwright

“Governments must act urgently to increase gas supply. This includes removing barriers to development of gas supplies in New South Wales and Victoria and introducing policy to improve competition in gas supply.”

She added that it could be argued that if the gas supply market were more competitive, production would be increasing in response to the current high prices.

“It is important to ensure that gas-reliant industries do not become permanently lost to Australia because of a price increase that is expected to ease after 2019.”