PERTH (miningweekly.com) – The Victorian government on Wednesday proposed reforms to the gas market that would place a temporary cap on gas exports from the state to ensure local supplies.
“There is something seriously wrong when you can buy Australian gas in Japan for a cheaper price than what businesses in Victoria are being charged, this needs to change,” said Energy, Environment and Climate Change Minister Lily D’Ambrosio.
She noted that while the federal government’s plan to put export controls on Australia’s major liquefied natural gas (LNG) producers as set out in the Domestic Gas Security Mechanism, was a step in the right direction, it was not sufficient.
“The commonwealth’s proposed reforms don’t go far enough, soon enough. We need immediate action – that’s what our plan delivers.”
The Australian Petroleum Production & Exploration Association (Appea) CEO Dr Malcolm Roberts said that calls for tougher export controls were an attempt by the Victorian government to evade its responsibility for helping to create a tight east coast gas market.
“For years now, Victoria has chosen to ignore industry warnings of shrinking gas supply and rising prices and has refused to develop its own onshore gas,” Roberts said.
“The government has put green votes before the needs of local industry and residential customers, imposing bans and moratoriums on local gas development. It has played a short-term political game.
“Now, the policy chickens are coming home to roost. Energy costs are rising and jobs are at risk.”
Roberts said that the Victorian government should be part of the solution and could support local gas development.
Geoscience Australia estimates indicate that onshore gas resources in Victoria had the potential to supply Victoria’s needs for decades, Roberts pointed out.
“Numerous independent scientific reviews have confirmed that gas development is safe for the environment.
“Instead, Victoria continues with its absurd position of refusing to develop its own gas but then complaining about tight supply and rising prices. It still expects other states to solve its self-inflicted problem.”
Roberts noted that industry would need to spend up to A$50-billion to deliver new gas supplies to 2030, while the Victorian government’s approach was not to encourage investment, but to create more political controls and risks.
“While short-term domestic gas prices have risen, average gas prices across the economy remain below LNG prices - this means the Victorian government’s proposal does not meet its own test.
“If the Victorian government truly cared about the pressures facing local businesses that rely on gas, it would unlock the gas that lies undeveloped in its own state.”